Islamabad, Pakistan, January 5, 2011—IFC,
a member of the World Bank Group, the Asian Development Bank, Citibank,
and Pakistan’s MCB Bank announced today that they have completed a landmark
trade transaction that will help boost the textile industry in Pakistan,
a sector that accounts for over 60 percent of the country’s industrial
The four banks provided trade finance
coverage of up to €110 million for Ibrahim Fibers Limited to import state-of-the-art
German machinery to produce polyester staple fiber and polyester chips.
The additional 650 tons per day capacity made possible by the transaction
will more than double Ibrahim Fiber’s polyester production, already one
of Pakistan’s highest, to 1,250 tons per day.
By providing guarantees that cover the
payment risk in trade transactions, IFC’s Global Trade Finance Program
and ADB’s Trade Finance Program help increase trade finance and the flow
of goods to and from emerging market countries. For this transaction, IFC
assumed 30 percent of MCB Bank's risk, and ADB 19 percent. Citibank managed
the balance against the original letter of credit established by MCB Bank.
“The cover arranged by IFC, ADB, and
Citibank portrays the high degree of confidence these leading global financial
institutions have in MCB,” said Farooq A. Khan, Head of Trade Products
Division at MCB Bank.
“Citi is proud to be a part of this
transaction. Our widespread global network across more than 100 countries
enables us to leverage those relationships to promote our common agenda
to support and enhance private sector investment in Pakistan,” said Arif
Usmani, Citibank’s Pakistan Country Officer.
“ADB's Trade Finance Program supports
large volumes of trade business in Pakistan on its own,” said Steven Beck,
Head of Trade Finance in ADB's Private Sector Operations Department. “However,
cooperating with IFC, Citibank, and MCB was key to closing this challenging
deal, a transaction that will support businesses and create jobs in Pakistan.”
“By responding to the shifting needs
of its partner banks, IFC’s Global Trade Finance Program is helping stimulate
trade flow and contributing to economic growth,” said Scott Stevenson,
Senior Manager of IFC’s Global Trade Finance Program. “The innovative
partnership of this transaction will help stimulate one of the key sectors
in Pakistan’s economy.”
Over the past six months, IFC has provided
Pakistani banks with $328 million in trade finance guarantees, a $125 million
increase in guarantees compared to the same period last year. The trade
financing helps Pakistan increase cross-border trade, and benefits many
important business sectors. Last year, ADB’s Trade Finance Program supported
over $600 million of cross-border trade in Pakistan.
IFC, a member of the World Bank Group,
is the largest global development institution focused on the private sector
in developing countries. We create opportunity for people to escape poverty
and improve their lives. We do so by providing financing to help businesses
employ more people and supply essential services, by mobilizing capital
from others, and by delivering advisory services to ensure sustainable
development. In a time of global economic uncertainty, our new investments
climbed to a record $18 billion in fiscal 2010. For more information, visit
For more information about the Asian
Development Bank, visit www.adb.org.
For more information about MCB Bank, visit www.mcb.com.pk.
For more information about Citibank, visit www.citigroup.com.
For more information about Ibrahim Fibers
Limited, visit www.igcpk.com.