IFC initiates a $120 million fund to enhance Pakistan’s agricultural value chain and assist farmers.
The International Finance Corporation (IFC) has initiated a Rs33.6 billion ($120 million) fund to facilitate funding from a foreign bank’s Pakistani affiliate to a local fertiliser producer, aimed at enhancing the country’s agricultural value chain and assisting farmers, as stated by IFC on Tuesday.
The financing will facilitate long-term Pakistani rupee-denominated lending from Standard Chartered Bank Pakistan (SCBP) Limited to Engro Fertilisers Limited, hence enhancing Pakistan’s agricultural value chain through the mobilisation of local capital, as stated by IFC.
This would assist Engro Fertilisers in making capital investments for facility maintenance and turnarounds, ensuring a continuous supply of urea and other fertilisers to satisfy national demand and support agricultural initiatives that align with its primary objective of dependable production.
Ashruf Megahed, the IFC regional industry head for the Middle East and Central Asia, stated that the project will establish new opportunities for sustainable local currency financing, fostering growth and improving financial resilience to mitigate risks in a sector vital to the nation’s economy.
“This investment exemplifies the robustness of our collaboration with Engro Fertilisers and Standard Chartered Bank, as well as our mutual dedication to delivering innovative solutions that tackle challenges sustainably,” IFC reported him as stating.
The investment, intended to bolster Pakistan’s agricultural sector and enhance food security, is backed by a first-loss counter guarantee from the IFC-Canada Facility for Resilient Food Systems, as stated by the global financing corporation. This signifies IFC’s inaugural investment in local currency within Pakistan.
Engro has consistently endeavoured to address Pakistan’s most urgent challenges effectively. Engro Fertilisers CEO Ali Rathore stated, “Utilising local capital to enhance local value chains demonstrates our dedication to the nation and to our farmers—the foundation of Pakistan’s economy—by ensuring dependable fertiliser production.”
“We express our gratitude to our partners, IFC and Standard Chartered Bank, for facilitating our progress in this mission.”
Agriculture constitutes 24 percent of Pakistan’s gross domestic product (GDP) and 40 percent of employment, as reported by the IFC. The funding will assist in tackling issues such as inefficient supply chains, inadequately funded agricultural programs, low literacy rates, and escalating input costs.
Standard Chartered is dedicated to providing financing solutions that facilitate sustainable growth and long-term resilience within Pakistan’s economy’, stated SCB CEO Rehan Shaikh.
This collaboration with IFC and Engro Fertilisers embodies our mutual objective of enhancing food security and bolstering one of the nation’s essential value chains.