The International Finance Corporation (IFC) and Bank Alfalah Limited have signed a Project Agreement for IFC’s planned investment of up to US$100 million in Pakistan’s first Diversified Payment Rights (DPR) note. The transaction represents a significant development for Pakistan’s debt capital market and introduces a new mechanism for banks to access long-term international financing through future foreign-currency payment flows.
Under the DPR structure, Bank Alfalah will be able to raise financing against diversified future foreign-currency receivables generated through eligible payment flows. The structure is designed to provide an alternative source of long-term foreign-currency funding while reducing reliance on conventional financing channels. Importantly, the market-based arrangement does not require a sovereign guarantee and could potentially attract additional participation from international private investors, subject to market conditions.
The initial transaction is expected to provide financing of up to US$100 million, with the programme potentially creating a platform for further transactions in the future. The initiative follows regulatory and policy work undertaken by the IFC, State Bank of Pakistan and Ministry of Finance to establish an appropriate framework for DPR issuances in Pakistan. Bank Alfalah is the first Pakistani bank to undertake a DPR programme under this framework, creating a possible pathway for similar transactions by other banks.
The agreement was signed at the Finance Division in Islamabad in the presence of Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb. The Finance Minister highlighted the importance of diversifying Pakistan’s sources of foreign-currency financing and developing market-based mechanisms that can support investment and productive economic activity. Stakeholders also stressed the importance of developing a pipeline of eligible projects that can effectively utilise financing raised through the new channel.
The transaction marks a notable step in the development of Pakistan’s debt capital market and its broader external financing framework. If the initial programme performs successfully and market conditions remain supportive, the DPR structure could provide Pakistani banks with another avenue for accessing international capital while potentially encouraging greater participation from institutional and private investors in the country’s financial markets.
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