UAE banks back Pakistan’s $1bn fundraising

UAE banks have led the $1 billion fundraising by Pakistan as it grapples with economic challenges.

The five-year facility, split into conventional and Islamic tranches, was partially guaranteed by the Asian Development Bank, Dawn, a Pakistani English daily, reported.

Dubai Islamic Bank acted as the sole Islamic global coordinator, while Standard Chartered Bank was the mandated lead arranger and bookrunner.

Other banks include Abu Dhabi Islamic Bank, Sharjah Islamic Bank and Ajman Bank, the report said.

Pakistan’s finance ministry said that the Islamic facility was structured in compliance with Accounting and Auditing Organization for Islamic Financial Institutions standards, and accounts for 89 percent of the total financing amount.

The ministry said that the government secured funding from the Middle East’s financial institutions after nearly two and a half years, despite heightened geopolitical tensions in the region, which have escalated as a result of the recent Israel-Iran conflict.

“The transaction marks the beginning of a new partnership of the government of Pakistan with Middle Eastern banks,” the ministry said.

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The country’s central bank chief told Reuters in August 2024 that Pakistan aimed to raise up to $4 billion from Middle Eastern commercial banks by the next fiscal year.

In January the UAE agreed to roll over the payment of $2 billion due from Pakistan in January, Pakistan’s prime minister Shehbaz Sharif said.

Saudi Arabia renewed its $3 billion deposit with Pakistan’s central bank for another year last December.