The International Finance Commission (IFC), an investment arm of the World Bank, has shown interest in divestment of shares in Pakistan’s state-owned enterprises.
Executive Vice President and CEO of IFC Jin Yong Cai, met Pakistan’s Finance Minister Ishaq Dar in Washington, who was here with Prime Minister Nawaz Sharif who visited the United States last week at the invitation of President Obama.
IFC has more than doubled its investments in Pakistan to around $1 billion and wants to expand it to the country’s agriculture sector and also through participation in the privatization program. Mr. Cai informed the Minister that IFC participated in the recent divestment of shares of Habib Bank Limited and was keen to participate in future transactions.
He said IFC is keenly looking at the agricultural sector in Pakistan and observed that investment in smaller units in agricultural sector can increase their productivity and boost country’s exports. EVP IFC observed that Chinese investment in infrastructure can lead to growth in all sectors of Economy.
The IFC CEO congratulated Dar on the successful issuance of Euro Bonds and observed that currently capital is flying out of Emerging Market economies and despite the turbulence in capital markets the issuance of Euro Bonds reflects investors’ confidence in Pakistan economy.
Pakistan issued a new Eurobond of $500 million in September with a coupon rate of 8.25 percent. It was Pakistan’s first issue this year, after returning to the global capital market in April last year, when South Asia’s second-biggest economy raised $2 billion.
Since then the government has sold shares in Pakistan Petroleum Limited (PPL), the country’s major natural gas supplier and three banks, including the Habib Bank Limited in April this year which raised $1.02 billion, the biggest so far in the divestment plans.
Pakistan also plan to offer government’s shares in Mari Petroleum and Pak Arab Refinery Limited by end-2015.
After years of slow-growth, South Asia’s second-biggest economy is gaining traction and grew by 4.5 percent in the year that ended on June 30. Pakistan is aiming for 5.5 growth in the current fiscal year. Reforms being carried out under an IMF program secured in 2013 has helped stabilized the economy.