Middle East ( Europe Brief News): Pakistan secures $1B syndicated loan with Asian Development Bank (ADB) guarantee, marking return to Middle Eastern markets after over two years.
The facility, which supports Pakistan’s long-term fiscal stability, is supported by the ADB’s Policy-Based Guarantee under its “Improved Resource Mobilization & Utilization Reform” initiative.
Standard Chartered Bank was the required lead arranger and bookrunner, and Dubai Islamic Bank was the only Islamic global coordinator. Ajman Bank, Sharjah Islamic Bank, Abu Dhabi Islamic Bank, and HBL are among the other participating banks.
“This landmark transaction underscores the growing confidence of leading regional financiers in Pakistan’s fiscal and macroeconomic recovery,” the ministry said in a statement.
The $1 billion loan is divided into several tranches and has a five-year term. Remarkably, 89% of the facility completely conforms with AAOIFI requirements and is founded on Islamic financial principles. Conventional borrowing accounts for the remaining 11%.
Additionally, it is the first facility to receive ADB’s Policy-Based Guarantee in connection with certain policy reform initiatives carried out by a member nation.
The agreement, according to the government, shows that the global financial world has restored faith in Pakistan’s economic leadership and paved the way for closer ties with banks in the Middle East.
“The success of this transaction marks Pakistan’s re-entry into international commercial markets and sets the foundation for further engagement with regional financiers,” the statement added.
What are the key features included in the deal?
The facility combines conventional financing (11%) with Islamic finance (89%) that complies with AAOIFI criteria.
Standard Chartered Bank served as the required lead arranger and bookrunner, while Dubai Islamic Bank served as the only Islamic global coordinator. Ajman Bank, Sharjah Islamic Bank, Abu Dhabi Islamic Bank, and Pakistan’s Habib Bank Limited are further financiers.
For the first time, a facility connected to particular reform initiatives carried out by a member nation has received support from an ADB Policy-Based Guarantee.
The funding intends to boost the momentum of economic change, bolster Pakistan’s fiscal resilience, and facilitate the nation’s re-entry into global trade markets.
The successful deal shows that Middle Eastern investors are once again confident in Pakistan’s macroeconomic direction and budgetary prospects.
