Neelum Jhelum Hydropower Company (Pvt) Limited has entered into a financing agreement amounting to Rs 100 bn with a consortium of 16 banks led by National Bank of Pakistan for raising funds through one of the largest Shariah-compliant facility. The financing is based on Diminishing Musharika structured by NBP Aitemaad. The Sukuk is structured with a tenor of 10 years and is backed by the sovereign guarantee from Government of Pakistan.
NJHPC mandated National Bank of Pakistan to act as Mandated Lead Arranger for arrangement of up to Rs 100 billion through issuance of rated, secured and privately placed Sukuks to partially finance the construction of strategically important 969 MW hydel power project located in District Muzaffarabad, Azad Jammu & Kashmir. For this financing, a signing ceremony was held on Wednesday here and attended by President & CEO NBP Syed Iqbal Ashraf, Chairman Wapda Zafar Mahmood, member finance Wapda Anwaar ul Haq, CEO NJHPCL Lieutenant General Muhammad Zubair and other presidents and senior officials of all the 16 participating financial institutions.
Pakistan International Airlines Corporation (PIA) recently announced the successful closure of its US$ 120,000,000 Secured Syndicated Islamic Facility.
Citibank and Mashreq Bank PSC acted as joint initial mandated lead arrangers, bookrunners and coordinators for the facility. The transaction received an overwhelming response from the market and was over-subscribed.
The syndicate comprised of a diverse set of banks spread across GCC and South Asia. The participating banks included Askari Bank Limited, National Bank of Pakistan, Noor Bank PJSC, United Bank Limited and Warba Bank KSCP as mandated lead arrangers and bookrunners, Bank Islam Brunei Darussalam Berhad as lead arranger and Bank Alfalah Limited as arranger. This transaction once again reiterates the multitude of synergies developing between the Middle East and Pakistan.
The facility carries a tenor of three years and will be utilized to support the Company’s ongoing strategic growth plans and general corporate purposes.
Pakistan's banking sector enters 2015 promising more deal-making activities. State-run National Bank of Pakistan has expressed interest in potentially acquiring Burj Bank Ltd. NBP recently said it will conduct due diligence on Burj, and hoped to complete the exercise in a ‘short timeframe’. The Burj deal is being closely watched by the market, as it has so far failed to meet the central bank’s minimum capital requirement (MCR) of Rs10bn. In case the deal goes through, it remains to be seen if Burj would exist as a standalone Islamic bank, or if its operations will be merged with NBP’s Islamic banking section.
The National Bank of Pakistan (NBP) has sought regulator’s approval to conduct due diligence of Burj Bank, as the bank wants to continue its footprints in the Islamic banking industry. The NBP had already initiated the process of converting its existing branches into Islamic ones, which will increase to 175 by the end of this year. The acquisition of Burj Bank provides NBP with the opportunity to become a key player in the Islamic banking industry of Pakistan. Burj Bank is the smallest of five full-fledged Islamic banks in Pakistan with a network of 75 branches. The State Bank of Pakistan is stepping up its push to develop Islamic banking, encouraging lenders to expand their operations in the world’s second most populous Muslim nation.
Afghanistan seems like a country which is tailor-made for Islamic finance, but it still doesn't have a single Islamic bank. However, moves are afoot to bring it to the country. Afghanistan has rarely been out of the news over the past nine years, as around 40 countries have been endeavouring to turn the country from one of the poorest to something more stable and prosperous. The economy, after years of desperate hardship has been growing at around 10 per cent a year, admittedly from a very low base.
The banking system has been created virtually from scratch and the Central Bank of Afghanistan or Da Afghanistan Bank (DAB), as it is better known, is at the forefront of the change, although the transformation not has been without its challenges.
The country has 17 (mostly private) banks including a number of foreign banks such as Standard Chartered, Punjab National Bank, National Bank of Pakistan, Habib Bank (also from Pakistan) and Bank Alfalah.