Islamabad, Pakistan, June 4
–IFC, Habib Bank, and Citibank announced today that they have jointly executed a trade finance transaction to help import equipment for a new power generation plant that will reduce Pakistan’s power shortage. IFC is a member of the World Bank Group.
IFC and Citi worked together to provide coverage of up to €73 million (8 billion Pakistani rupees) for Hub Power Company, Pakistan’s first and largest independent power producer, to import power plant equipment. Under its Global Trade Finance Program, IFC assumed 50 percent of Habib Bank's risk. Habib Bank, Pakistan’s largest privately owned bank, established the original letter of credit.
By providing guarantees that cover the payment risk in trade transactions, IFC’s Global Trade Finance Program helps increase trade finance and the flow of goods between emerging market countries.
"The development of this structure demonstrates our leadership in providing complex trade solutions tailored to meet our client’s’ needs. We value our partnership with IFC's Global Trade Finance Program, which complements our trade activities in Pakistan and across the world," said Citi Country Officer and Managing Director Arif Usmani.
“This trade finance transaction is a landmark deal for Habib Bank. The transaction is an example of Habib Bank’s commitment to our clients and we look forward to replicating similar transactions to support power and infrastructure projects,” said Tariq Mateen Khan, Habib Bank’s General Manager for Financial Institutions and International Banking.
“The structure used in this transaction demonstrates how IFC provides innovative responses to meet urgent and challenging needs,” said Shehzad Sharjeel, IFC Trade Finance Officer for the Middle East and North Africa. “IFC’s trade finance exposure in Pakistan has surpassed $210 million during the last nine months of this fiscal year, three times more than fiscal 2008, reflecting IFC’s commitment to promoting private sector development through supporting trade.”
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, please visit
www.ifc.org
.
