Landmark $1 billion five-year sovereign financing to Pakistan completed: DIB

Dubai: DIB has announced the successful completion of a landmark $1 billion syndicated term-finance facility for the Government of Pakistan, marking the sovereign’s official re-entry into Middle Eastern financial markets after more than two years.

The five-year facility, which was announced three weeks ago, is partially guaranteed by the Asian Development Bank (ADB) under its Policy-Based Guarantee (PBG) program. This is the first time ADB has backed a sovereign transaction for Pakistan linked directly to fiscal reforms, making the deal a notable milestone in regional financing.

“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,” said Dr. Adnan Chilwan, Group CEO of DIB.

"DIB is delighted to have re-introduced 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."

DIB acted as the Sole Islamic Global Coordinator and Joint Mandated Lead Arranger and Bookrunner alongside Standard Chartered Bank. The deal saw significant participation from regional Islamic banks, including Abu Dhabi Islamic Bank (ADIB) as Mandated Lead Arranger, and Sharjah Islamic Bank, Ajman Bank, and Habib Bank Limited (HBL) as Arrangers.

Structured across Islamic and conventional tranches, 89% of the facility was raised through a Shariah-compliant structure, underlining the growing appetite for ethical, values-driven sovereign finance.

Muhammad Aurangzeb, Minister of Finance, Government of Pakistan, 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 facility is underpinned by an ADB guarantee tied to Pakistan’s economic reform commitments, particularly efforts to enhance fiscal resilience and resource mobilization. The Ministry of Finance previously noted that the ADB’s backing was instrumental in attracting broad-based investor interest.

The completion of the deal signals renewed investor confidence in Pakistan’s macroeconomic trajectory and opens the door for further collaboration with Middle Eastern capital markets, especially through Shariah-compliant channels.

"This facility represents a milestone in sovereign Islamic finance, combining the strengths of regional and international institutions under a robust, Shariah-compliant structure," DIB said in a statement.

"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."