In a landmark move to bolster Pakistan’s vital yet beleaguered agriculture sector, the International Finance Corporation (IFC) today announced its first-ever Pakistani Rupee (PKR) denominated investment, anchoring a PKR 33.6 billion financing package for Engro Fertilizers Limited.
The innovative arrangement involves an unfunded Partial Credit Guarantee from the IFC, supporting a long-term local currency loan provided by Standard Chartered Bank Pakistan. This initiative, aimed at strengthening food security, is further secured by a first loss counter guarantee from the IFC-Canada Facility for Resilient Food Systems.
Engro Fertilizers, a leading domestic producer, will utilise the funding for essential capital investments, including facility maintenance and turnarounds. These measures are intended to ensure an uninterrupted supply of urea and other critical fertilizers to meet national demand and sustain crucial farmer support programmes.
The investment arrives at a critical time for Pakistan’s economy, with the agriculture sector contributing 24 percent of the nation”s GDP and accounting for 70 percent of its exports and 40 percent of employment. Despite its significance, the sector faces systemic challenges, including inefficient supply chains, underfunded farmer initiatives, and escalating input costs.
This engagement signals a new pathway for mobilising domestic capital, expanding access to long-term local currency financing solutions seen as critical for economic growth in key sectors.
‘Engro has always strived to solve Pakistan’s most pressing issues meaningfully,’ said Engro Fertilizers CEO, Ali Rathore. ‘Using local capital to strengthen local value chains reflects our commitment to the country and to our farmers – the backbone of Pakistan’s economy – through reliable fertilizer production.’
Ashruf Megahed, IFC’s Regional Industry Head for Manufacturing, Agribusiness and Services, commented on the project”s strategic importance. ‘Through this project, we are opening new pathways for local currency long-term financing that support growth and financial resilience to manage country risk in a sector vital to the country’s economy,’ he stated.
Rehan Shaikh, CEO of Standard Chartered Pakistan, echoed the collaborative sentiment. ‘This partnership with IFC and Engro Fertilizers reflects our shared vision of strengthening food security and supporting one of the country’s most critical value chains,’ he said, adding that the bank is keen to replicate the successful financial structure across its network.