The International Finance Corporation (IFC) and Bank Alfalah on Thursday signed a $100 million financing agreement under the Diversified Payment Rights (DPR) Programme, marking the first such transaction in Pakistan.
The agreement was signed at the Ministry of Finance by Momina Aijazuddin, IFC’s Regional Industry Director, Financial Institutions Group for Middle East & Central Asia, and Atif A. Bajwa, President & CEO of Bank Alfalah Ltd. Finance Minister Muhammad Aurangzeb presided over the ceremony.
The initial transaction provides up to $100 million in financing through the DPR structure.
According to the Ministry of Finance, the programme could support additional financing and attract wider participation from international institutional and private investors, subject to market conditions and the performance of the initial transaction.
The DPR structure enables long-term foreign currency financing against eligible future foreign-currency payment flows. The government expects the mechanism to diversify external financing sources and improve access to international capital markets.
Finance Minister Muhammad Aurangzeb said the transaction followed extensive regulatory, policy and technical coordination among the Ministry of Finance, State Bank of Pakistan (SBP), IFC and Bank Alfalah.
He stressed the need to diversify Pakistan’s foreign currency financing sources and develop market-based mechanisms to support investment and productive economic activity.
He also called for effective utilisation of the financing channel and development of a pipeline of projects requiring foreign currency funding.
IFC welcomed the transaction and said the DPR structure could provide an additional channel for long-term international financing while supporting the development of Pakistan’s capital markets.
Bank Alfalah said it was the first Pakistani bank to undertake a DPR transaction and would use the structure to support eligible foreign currency requirements and productive investment.
The Ministry of Finance said the transaction could serve as a model for similar DPR arrangements by other Pakistani banks, depending on market conditions and the performance of the initial programme.
MoF Adviser Khurram Schehzad said the agreement would create a new market-based channel for long-term foreign currency financing, help attract international private capital and potentially enable other Pakistani banks to pursue similar transactions.
