The Islamic Trade Finance Corporation (ITFC) has provided US$761.5mn in financing to the government of Pakistan for energy imports.

State-owned firms Pakistan State Oil Company, Pak Arab Refinery and Pakistan LNG will use the facility to fund imports of crude oil, refined petroleum products and liquefied natural gas (LNG), Pakistan’s ministry of economic affairs says in a statement.

The syndicated murabaha facility, signed on November 10 and available immediately, has a tenor of one year. The ITFC had not responded to a request for further details of the deal from GTR as of press time.

The ministry said that the ITFC had initially agreed to extend US$300mn in financing for energy imports, but the deal was significantly oversubscribed due to the “growing energy needs of the country and enhanced confidence level of international financial institutions on its economic reforms and recovery amid the Covid-19 pandemic”.

“The financing facility will also be helpful in financing [the] oil and gas import bill of the country and easing pressure on foreign exchange reserves,” the statement adds.

Pakistan’s import costs hit a record high this year, according to official data cited by Bloomberg, due to surging prices of key commodities such as LNG.

In February, the Pakistani government and ITFC also agreed on an annual financing plan for energy imports under which the ITFC, part of the Islamic Development Bank, said it would provide US$1.1bn in financing.