DIB Successfully Completes USD 1 Billion Sovereign Financing For Government Of Pakistan

Dubai Islamic Bank (DIB) has successfully completed a significant US$1 billion syndicated term-finance facility for Pakistan's government. This was arranged with a consortium of regional and international financial institutions. The five-year facility is notable for being partially guaranteed by a Policy-Based Guarantee (PBG) from the Asian Development Bank (ADB). This marks the first PBG transaction of its kind by ADB for Pakistan.

The Islamic tranche, structured as an AAOIFI-compliant Commodity Murabaha, constitutes about 89% of the total facility. This reflects the increasing demand for Shariah-based financing, aligning with Pakistan’s goal to expand Islamic finance. DIB acted as the Sole Islamic Global Coordinator and, alongside Standard Chartered, served as Joint Mandated Lead Arranger and Bookrunner.

This transaction signifies Pakistan's strategic re-engagement with Middle East capital markets after over two years. It highlights growing investor confidence and a renewed interest in ethical and cost-effective financing solutions. The inclusion of an ADB Policy-Based Guarantee has been crucial in facilitating Pakistan’s return to the international commercial market.

Minister of Finance, Government of Pakistan Mr. Muhammad Aurangzeb stated, "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. We deeply value the role of partners like DIB and ADB in supporting our efforts to ensure macroeconomic stability and sustainable growth."

The structure was developed in close coordination with the Government of Pakistan, ADB, and leading financial institutions. It aligns market capabilities with national priorities, showcasing how values-driven finance can support tangible outcomes. Dr. Adnan Chilwan, Group CEO of DIB, remarked on this milestone: "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 pleased to have reintroduced Pakistan’s credit to the Islamic term financing market after more than two years through this 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," added Dr. Chilwan.

Supporting Sustainable Economic Development

This facility represents a milestone in sovereign Islamic finance by combining regional and international strengths under a robust Shariah-compliant structure. For participating institutions, it offers an opportunity to support sustainable economic development across key emerging markets while advancing global adoption of Islamic finance practices.

The transaction demonstrates how collaboration among financial institutions can support sustainable growth and macroeconomic resilience in emerging markets like Pakistan. At DIB, there is a commitment to enabling such purposeful transactions that serve present needs while strengthening resilience for a more inclusive financial future.

With inputs from WAM