Dubai Islamic Bank (DIB), the largest banking institution in the UAE, has successfully finalized a syndicated term finance facility worth $1 billion with the Government of Pakistan. This significant financing deal was arranged in collaboration with a consortium of prominent regional and international financial institutions, according to an official statement released on Wednesday.
The five-year facility is notably backed by a partial guarantee known as a Policy-Based Guarantee (PBG) from the Asian Development Bank (ADB). This marks the first-ever PBG transaction of its kind undertaken by ADB for Pakistan, underscoring strong multilateral support for the country’s fiscal reforms.
Approximately 89% of the facility is structured as an Islamic tranche, compliant with AAOIFI standards under a Commodity Murabaha arrangement. This reflects the growing global and regional demand for Shariah-compliant financing and aligns with Pakistan’s strategic goals to expand its Islamic finance sector.
Dubai Islamic Bank acted as the sole Islamic global coordinator for this facility and, alongside Standard Chartered Bank, served as the joint mandated lead arranger and bookrunner. Other key regional Islamic banks participating in the deal included Abu Dhabi Islamic Bank, Ajman Bank, and Sharjah Islamic Bank.
Minister of Finance Muhammad Aurangzeb highlighted the importance of the deal, stating, “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.”
Dr. Adnan Chilwan, Group CEO of Dubai Islamic Bank, added, “This transaction marks a key milestone in demonstrating how Shariah-compliant financing can be scaled effectively to meet sovereign objectives while upholding partnership and prudence. DIB is proud to have reintroduced 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 Shariah-compliant liquidity in the near future.”
This financing facility comes amid broader international support for Pakistan, including a recent rollover of $3.4 billion in commercial loans from China. The inclusion of the ADB’s Policy-Based Guarantee has been instrumental in facilitating Pakistan’s return to the international commercial market, signaling renewed confidence in the country’s ongoing fiscal reforms and macroeconomic resilience.
The Islamic bank’s statement emphasized that this transaction represents a strategic re-engagement of Pakistan with Middle Eastern capital markets after more than two years, showcasing growing investor trust and a renewed appetite for collaboration through ethical, cost-effective financing solutions.