DIB arranges landmark $1 billion sovereign financing for the Government of Pakistan

Khaleej Times

4 days ago

DIB, the world's first Islamic bank and the largest in the UAE, has announced the successful completion of a $1 billion syndicated term-finance facility for the Government of Pakistan, arranged in collaboration with a consortium of regional and international financial institutions.
The five-year facility is partially guaranteed by a Policy-Based Guarantee (PBG) from the Asian Development Bank (ADB) — marking the first PBG transaction of its kind undertaken by ADB for the country.
The Islamic tranche, structured as an AAOIFI-compliant Commodity Murabaha, represents approximately 89 per cent of the total facility which reflects the growing demand for Shariah-based financing and supports Pakistan's strategic objective of expanding Islamic finance.
DIB acted as the Sole Islamic Global Coordinator and alongside Standard Chartered also served as the Joint Mandated Lead Arranger and Bookrunner. Other leading Islamic banks from the region included Abu Dhabi Islamic Bank, Ajman Bank and Sharjah Islamic Bank.
Pakistan's Minister of Finance, Muhammad Aurangzeb, said: 'This landmark financing arrangement not only underscores the strong confidence of regional and international financial institutions in Pakistan's economic reform trajectory, but also marks an important step in expanding our access to innovative and Shariah-compliant funding solutions. We deeply value the role of partners like DIB and ADB in supporting our efforts to ensure macroeconomic stability and sustainable growth.'
Dr Adnan Chilwan, Group Chief Executive Officer, DIB, commented: 'This transaction marks a key milestone in demonstrating how Sharia-compliant financing can be scaled effectively to meet sovereign objectives while upholding partnership and prudence. DIB is delighted to have re-introduced Pakistan's credit to the Islamic term financing market after a hiatus of over two years through an innovative structure. We are confident this will pave the way for the Government to access broader pools of Sharia-compliant liquidity in the near future. Developed in close coordination with the Government of Pakistan, the Asian Development Bank, and leading financial institutions, the structure reflects strong alignment between market capabilities and national priorities. It offers a compelling example of how values-driven finance can support tangible, real-economy outcomes. At DIB, we remain committed to enabling such purposeful transactions, ones that serve the present, strengthen resilience, and help shape a more inclusive financial future.'
This facility represents a milestone in sovereign Islamic finance, combining the strengths of regional and international institutions under a robust, Shariah-compliant structure. The inclusion of an ADB Policy-Based Guarantee has played a key role in facilitating Pakistan's return to the international commercial market, while reflecting confidence in the country's ongoing fiscal reforms and macroeconomic resilience.
For the Government of Pakistan, the transaction marks a strategic re-engagement with Middle East capital markets after more than two years, demonstrating growing investor trust and a renewed appetite for collaboration through ethical and cost-effective financing solutions.
For participating institutions, the transaction offers an opportunity to support sustainable economic development across key emerging markets, while advancing the global adoption of Islamic finance practices in sovereign funding.