ICIEC Supports Strategic Energy Imports for Pakistan Through USD150 Million Insurance Facility to Cover a Murabaha Syndicated Facility

ICIEC supported the Islamic Republic of Pakistan by providing insurance coverage for a crucial syndicated Murabaha financing facility worth USD150 million. The insurance policy specifically covers the portions from two prominent financial institutions in the MENA region, one from Kuwait and the other from the UAE, respectively.

This facility forms part of a broader USD200 million syndicated arrangement coordinated by the International Islamic Trade Finance Corporation (ITFC) to finance essential energy imports for Pakistan.

The syndicated Murabaha facility is structured to support the importation of essential commodities, including crude oil, refined petroleum products, and liquefied natural gas (LNG), all of which are pivotal to Pakistan’s energy security and economic stability. Through this Murabaha financing mechanism, ICIEC is providing coverage against the Non-Honouring of Sovereign Financial Obligations (NHSFO) of the Government of Pakistan, represented by the Ministry of Economic Affairs.

This transaction is crucial for the Government of Pakistan as it seeks to mobilize funds to sustain the procurement of strategic energy resources amidst challenging global market conditions. The arrangement eases the burden on Pakistan’s foreign exchange reserves by enabling access to international financing while also guaranteeing a steady supply of energy products essential for the country’s industrial and domestic requirements.

This transaction supports key Sustainable Development Goals, including SDG 7 (Affordable and Clean Energy), SDG 8 (Economic Growth), and SDG 17 (Partnerships). By securing essential energy imports, it promotes reliable and sustainable energy access, boosts economic stability, and fosters strong partnerships to address development challenges in Pakistan and beyond.

ICIEC’s role in this landmark transaction highlights its mandate to facilitate trade and investment flows within its Member States by providing Shariah-compliant risk mitigation solutions tailored to the requirements of sovereign entities and corporates. The collaboration between ICIEC, ITFC, and two prominent financial institutions from Kuwait and the UAE exemplifies the strength of multilateral partnerships in tackling development challenges faced by OIC member states through innovative financial instruments.