IFC, Habib Bank, and Citibank have jointly executed a trade finance transaction to help import equipment for a new power generation plant that will reduce Pakistan’s power shortage.

Citibank and World Bank member IFC worked together to provide coverage of up to €73mn for Hub Power Company, Pakistan’s first and largest independent power producer, to import power plant equipment. Under its global trade finance programme, IFC assumed 50% of Habib Bank's risk. Habib Bank, Pakistan’s largest privately owned bank, established the original letter of credit.

"The development of this structure demonstrates our leadership in providing complex trade solutions tailored to meet our client’s’ needs. We value our partnership with IFC's global trade finance programme, which complements our trade activities in Pakistan and across the world," says Citi country officer and managing director Arif Usmani.

“This trade finance transaction is a landmark deal for Habib Bank. The transaction is an example of Habib Bank’s commitment to our clients and we look forward to replicating similar transactions to support power and infrastructure projects,” says Tariq Mateen Khan, Habib Bank’s general manager for financial institutions and international banking.

“The structure used in this transaction demonstrates how IFC provides innovative responses to meet urgent and challenging needs,” says Shehzad Sharjeel, IFC trade finance officer for the Middle East and North Africa. “IFC’s trade finance exposure in Pakistan has surpassed US$210mn during the last nine months of this fiscal year, three times more than fiscal 2008, reflecting IFC’s commitment to promoting private sector development through supporting trade.”