Pakistan has secured a USD 4.5 billion worth of three-year trade financing facility from Jeddah-based Islamic Trade Finance Corporation (ITFC) to cover the import cost of crude, petroleum products and liquefied natural gas (LNG).

A formal financing framework agreement on the arrangement would be signed early next week, informed sources told Dawn.

The funds would be utilized under the Annual Financing Plan of roughly USD 1.5 billion each. The trade financing arrangement is in addition to about USD 31 million already signed by the Ministry of Economic Affairs with Saudi Fund for Development (SFD) for project financing of Mohmand dam, a couple of coal-based projects besides a few hydropower projects.

The ITFC’s financing would be utilized over three years (2021-23) by Pak-Arab Refinery Ltd (Parco), Pakistan State Oil (PSO) and Pakistan LNG Ltd (PLL) for import of crude oil, refined petroleum pro­ducts and LNG and help augment the country’s foreign currency reserves and provide resources to meet the oil import bill.

Pakistan’s oil import bill has amounted to about USD 10 billion in the first 11 months of the current fiscal but has been rising recently following the continuous uptrend in international oil prices.

ITFC is a member of the Islamic Development Bank Group and provides trade financing to member countries after putting together funds from financial institutions in the Middle East.

(SAM)