3 min read
The International Finance Corporation (IFC) has made its first local currency investment in Pakistan, signaling a shift toward deeper domestic capital markets. The IFC announced a PKR 33.6 billion Partial Credit Guarantee, equal to about US$120 million, to back long-term rupee financing for Engro Fertilizers.
The guarantee is unfunded and supports a PKR-denominated loan from Standard Chartered Bank Pakistan Limited to Engro Fertilizers Limited. The structure also includes a first-loss counter guarantee from the IFC-Canada Facility for Resilient Food Systems. Together, the package is designed to strengthen Pakistan’s agriculture sector and improve food security.
This transaction marks IFC’s first PKR-based investment in the country. As a result, it expands access to long-term financing in both local and foreign currencies. Such funding remains critical for economic growth, especially in agriculture and micro, small, and medium enterprises.
By relying on rupee financing, Engro Fertilizers is tapping domestic capital to build operational resilience. The company plans to use the funds for facility maintenance and scheduled plant turnarounds. These investments aim to ensure an uninterrupted supply of urea and other fertilizers across Pakistan.
In addition, the financing will support farmer-focused programs tied to Engro’s production network. These initiatives help maintain continuity in outreach and productivity efforts. They also align with the company’s broader goal of reliable fertilizer availability.
Agriculture plays a central role in Pakistan’s economy. The sector contributes 24 percent of GDP, accounts for 70 percent of exports, and employs 40 percent of the workforce. However, structural problems remain, including weak supply chains, limited farmer funding, low literacy, and rising input costs.
This investment is expected to ease some of these pressures. By unlocking long-term local financing, the project addresses funding gaps that often slow sector growth. It also reduces exposure to currency risk for large-scale agri-industrial players.
Engro Fertilizers CEO Ali Rathore said the company has long focused on solving national challenges through practical action. He said using local capital to strengthen local value chains reflects Engro’s commitment to farmers and the wider economy. Rathore also thanked IFC and Standard Chartered for supporting this mission.
IFC Regional Industry Head Ashruf Megahed said the deal highlights a strong partnership among the institutions. He noted that the project introduces new models for long-term local currency financing. According to him, such structures help manage country risk while supporting a vital economic sector.
Standard Chartered Pakistan CEO and Head of Coverage Rehan Shaikh described the transaction as a step toward sustainable growth. He said the partnership supports food security and strengthens one of Pakistan’s most important value chains. Shaikh added that the bank aims to replicate this financing model across its network with IFC.
Together, the partners see the deal as a blueprint for future local currency investments. If scaled, it could reshape how large agricultural businesses fund long-term growth in Pakistan.
