DIB arranges $1bn sovereign financing for Pakistan

Business Recorder

09-07-2025

Dubai Islamic Bank (DIB), the largest bank in the UAE, has finalised a syndicated term finance facility deal worth $1 billion with the Government of Pakistan.
The facility was arranged in collaboration with a consortium of regional and international financial institutions, read a statement on Wednesday.
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% of the total facility, which reflects the growing demand for Shariah-based financing and supports Pakistan's strategic objective of expanding Islamic finance.
As per the statement, DIB acted as the Sole Islamic Global Coordinator and, alongside Standard Chartered, also served as the Joint Mandated Lead Arranger and Bookrunner.
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Other leading Islamic banks from the region included Abu Dhabi Islamic Bank, Ajman Bank and Sharjah Islamic Bank.
'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,' said Minister of Finance, Muhammad Aurangzeb.
Meanwhile, 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 reintroduced 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,' he said.
The Islamic bank shared that 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,' it said.