IFC launches first local currency investment in Pakistan
PSMU Desk
ISLAMABAD: The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has announced its first local currency investment in Pakistan, aimed at strengthening the country’s agriculture sector and enhancing food security.
According to a press release issued on Tuesday, the IFC’s investment will take the form of an unfunded partial credit guarantee of up to Rs33.6 billion, supporting long-term financing from Standard Chartered Bank Pakistan Limited to Engro Fertilisers Limited.
“This marks IFC’s first Pakistani rupee-denominated investment, expanding access to long-term financing solutions in both local and foreign currency—critical for economic growth, particularly in key sectors such as agriculture and micro, small, and medium enterprises,” the release said.
The financing will enable Engro Fertilisers to mobilize local capital for strengthening the agri-value chain, maintaining production facilities, and ensuring uninterrupted supply of urea and other fertilisers to meet national demand. The project also benefits from a first-loss counter guarantee from IFC-Canada’s Facility for Resilient Food Systems.
By leveraging PKR-denominated financing, Engro Fertilisers is promoting the use of domestic capital to enhance operational resilience and support farmer programs that complement the company’s mission of reliable production.
The press release highlighted the importance of agriculture in Pakistan, contributing 24% of GDP, 70% of exports, and 40% of employment, while noting systemic challenges such as inefficient supply chains, underfunded farmer programs, low literacy, and rising input costs. The IFC investment is intended to help address these gaps.
Engro Fertilisers CEO Ali Rathore said, “Using local capital to strengthen local value chains reflects our commitment to Pakistan and to our farmers—the backbone of the economy—through reliable fertiliser production. We are grateful to IFC and Standard Chartered Bank for enabling us to advance this mission.”
IFC’s Regional Industry Head for Manufacturing, Agribusiness, and Services in the Middle East and Central Asia, Ashruf Megahed, stated, “This investment reflects the strength of our partnership with Engro Fertilisers and Standard Chartered Bank and our shared commitment to providing innovative solutions sustainably. It opens new pathways for local currency long-term financing, supporting growth and financial resilience in a sector vital to the country’s economy.”
Rehan Shaikh, CEO and Head of Coverage at Standard Chartered Pakistan, added, “This partnership demonstrates our shared vision to strengthen food security and support one of Pakistan’s most critical value chains. Standard Chartered looks forward to replicating this successful structure across our network.”
The announcement comes two months after the State Bank of Pakistan (SBP) partnered with the IFC to expand local currency financing for the private sector. Under the International Swaps and Derivatives Association (ISDA) framework, this agreement allows the multilateral institution to invest in Pakistani rupees and manage exchange rate risks, addressing the mismatch that arises when companies borrow in hard currencies but earn revenues in local currency.
The move is expected to enhance the financial resilience of local businesses while supporting long-term economic stability.
