Pakistan’s first DPR programme: IFC, Bank Alfalah sign project agreement

ISLAMABAD - Pakistan's International Finance Corporation (IFC) and Bank Alfalah Limited have signed a Project Agreement for the country's inaugural Diversified Payment Rights (DPR) Programme. The ceremony took place at the Finance Division in Islamabad, with the Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb in attendance.

The DPR Programme, spearheaded by Prime Minister, offers a novel method for securing long-term foreign currency financing through suitable future foreign-currency payment flows. The main objective is to diversify external financing sources and enhance access to international capital markets. The initial transaction could potentially reach up to USD 100 million under the DPR structure, contingent upon market conditions and the success of the initial transaction.

If successful, the programme could pave the way for broader participation by international institutional and private investors, as well as additional financing in the future. Senator Muhammad Aurangzeb praised the collaboration between the Ministry of Finance, State Bank of Pakistan, IFC and Bank Alfalah in developing the transaction.

He emphasized the significance of diversifying Pakistan's sources of foreign currency financing and creating innovative financing mechanisms to support investment and productive economic activity. The Finance Minister underlined the importance of effectively utilizing the financing channel and constructing a pipeline of projects in need of foreign currency funding.

IFC representatives expressed gratitude for the support and coordination provided by the Government of Pakistan and the State Bank of Pakistan, along with the efforts of all stakeholders involved. They also expressed confidence in the DPR structure's potential to introduce an additional avenue for long-term international financing and boost the development of Pakistan's capital markets.

Bank Alfalah acknowledged the government's, State Bank of Pakistan's, and IFC's support, highlighting the importance of being the first Pakistani bank to undertake a DPR transaction. The bank pledged to leverage the structure to support eligible foreign currency requirements and productive investments. The DPR Programme represents a crucial milestone in Pakistan's debt capital market and external financing framework, potentially setting a precedent for future DPR transactions by other Pakistani banks, depending on market conditions and the performance of the initial program.