International Finance Corporation signs first $100m deal with private bank

According to Dawn, Bank Alfalah and the International Finance Corporation, the commercial arm of the World Bank, signed a $100 million financing on Thursday in what was described as a first. The agreement was executed at the Ministry of Finance in Islamabad under the Diversified Payment Rights Programme, with Finance Minister Muhammad Aurangzeb presiding over the ceremony. Momina Aijazuddin of the IFC and Atif Bajwa, the president and chief executive of Bank Alfalah, put their names to the document.

Under the mechanism, long-term foreign currency funding is raised against eligible future foreign-currency payment flows, which is intended to widen external funding sources and ease access to global capital markets. Finance Minister Aurangzeb stressed the need to diversify foreign currency sources and build a pipeline of eligible projects that need such funding. Bank Alfalah called it the first DPR transaction by a Pakistani bank and said it would use the structure to support eligible foreign currency needs.

The finance ministry said the initial transaction could be followed by further financing and wider participation from international investors, depending on market conditions and performance. Khurram Schehzad, an adviser to the finance ministry, called the arrangement a meaningful move that could open a market-based route for long-term foreign currency funding and attract overseas private capital.