IFC makes first PKR-denominated investment in Pakistan

December 23, 2025 (MLN): The International Finance Corporation (IFC) has made its first PKR-denominated investment in Pakistan, providing an unfunded Partial Credit Guarantee (PCG) of up to Rs33.6 billion (around US$120 million).

The guarantee is aimed at supporting long-term local currency financing extended by Standard Chartered Bank Pakistan Limited to Engro Fertilizers Limited.

The financing is designed to strengthen Pakistan’s agri-value chain by mobilising domestic capital and supporting long-term funding in local currency, a key requirement for improving food security and economic resilience.

The transaction also benefits from a first-loss counter guarantee from the IFC-Canada Facility for Resilient Food Systems, which enhances the overall risk structure.

This engagement represents IFC’s first local currency transaction in Pakistan, expanding access to long-tenor financing in both local and foreign currencies.

Such instruments are considered critical for economic growth, particularly in priority sectors including agriculture and micro, small and medium enterprises (MSMEs).

By leveraging PKR-denominated financing, Engro Fertilizers, one of Pakistan’s leading fertilizer producers, is utilising domestic capital to strengthen operational resilience while reducing exposure to foreign exchange risk.

The financing will support capital investments in plant maintenance and turnarounds, helping ensure uninterrupted production and supply of urea and other fertilizers to meet national demand.

The funding will also back farmer support programs, ensuring continuity of initiatives that complement Engro’s core mission of reliable fertilizer production and agricultural development.

Agriculture remains a critical pillar of Pakistan’s economy, contributing 24% to GDP, 70% of exports, and 40% of employment.

However, the sector continues to face structural challenges, including inefficient supply chains, underfunded farmer programs, low literacy levels, and rising input costs.

The investment is expected to help address some of these gaps by improving financing access and strengthening value-chain efficiency.

Commenting on the development, Ali Rathore, CEO of Engro Fertilizers, said the company remains focused on solving Pakistan’s most pressing challenges in a meaningful way, adding that the use of local capital to strengthen domestic value chains reflects Engro’s commitment to farmers and the broader economy.

Ashruf Megahed, Regional Industry Head, Manufacturing, Agribusiness & Services for the Middle East and Central Asia at IFC, said the transaction reflects the strength of IFC’s partnership with Engro Fertilizers and Standard Chartered Bank.

He added that the deal opens new pathways for long-term local currency financing that support growth and enhance financial resilience.

Meanwhile, Rehan Shaikh, CEO & Head of Coverage at Standard Chartered Pakistan, said the bank remains committed to financing solutions that enable sustainable growth and long-term resilience.

He added that the structure could be replicated across the bank’s network to support key sectors of Pakistan’s economy.

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