In a major milestone for its financial recovery and international credibility, the Ministry of Finance of Pakistan has finalized a syndicated term finance facility worth $1 billion with several prominent Middle Eastern banks. This facility marks Pakistan’s strategic re-engagement with international commercial markets after a gap of over two and a half years.
The transaction, backed by a Policy-Based Guarantee under the Asian Development Bank’s “Improved Resource Mobilization & Utilisation Reform” program, demonstrates strong confidence in Pakistan’s economic reform agenda. This guarantee significantly de-risks the facility, making it an attractive proposition for foreign financiers.
Dubai Islamic Bank (DIB) took the lead as the Sole Islamic Global Coordinator. Alongside Standard Chartered Bank, it also served as a Mandated Lead Arranger and Bookrunner. The syndicate further includes Abu Dhabi Islamic Bank as a Mandated Lead Arranger, while Sharjah Islamic Bank, Ajman Bank, and Habib Bank Limited (HBL) joined in as Arrangers.
This is a five-year, multi-tranche financing arrangement comprising both Islamic and conventional components. The Islamic portion of the facility is notably dominant, accounting for 89 percent of the total financing and fully aligned with AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions) standards. The remaining 11 percent comprises conventional financing elements.
This is the first-ever facility backed by an ADB Policy-Based Guarantee that is linked directly to policy reform milestones achieved by a member country, in this case Pakistan. The structure of the transaction and its successful closure demonstrate increasing global acknowledgment of Pakistan’s recent fiscal policy improvements.
The $1 billion deal is not just a financial boost—it represents a broader shift in regional investment sentiment. The significant participation of Middle Eastern financial institutions signals their renewed confidence in Pakistan’s macroeconomic trajectory and its efforts to build long-term fiscal resilience.
The agreement comes at a critical time, as Pakistan continues to stabilize its economy through reforms aimed at improving revenue mobilization and institutional transparency. By securing this financing, the government reinforces its intent to responsibly manage public debt while creating partnerships that support sustainable economic growth.
More importantly, the deal represents the beginning of a fresh phase of collaboration between Pakistan and Middle Eastern financial institutions. This partnership could potentially open doors for future investments, joint ventures, and collaborative financial products, particularly in the areas of Islamic finance and infrastructure development.
This transaction serves as a reference point for future sovereign borrowing and is expected to pave the way for further engagements with international markets, building on a platform of policy credibility and financial innovation.
In a global environment marked by economic uncertainty, Pakistan’s successful completion of this $1 billion syndicated finance facility—particularly with such substantial Islamic financing—is a key indicator of its improving financial landscape and evolving relationships with international capital providers.