On Monday Karandaaz Pakistan and UK’s Department for International Development (DFID) introduced the Pakistan Credit Enhancement Facility (PCEF) to the public and private sector stakeholders in Islamabad.
PCEF is a local currency credit enhancement facility that is being set up to address and overcome existing constraints in the supply of local financing to infrastructure projects and to help the development of the local financial market. It is to be the first-of-its-kind facility in Pakistan that will invigorate the debt market to fuel infrastructure development in the country in the long-term.
At the event, Patricia Seex, Head of Economic Growth, DFID Pakistan speaking on the launch said, “I am delighted that DFID has supported the development of this innovative and important facility to help infrastructure developers access the finance they need at a price they can afford. This facility will contribute to addressing both Pakistan’s infrastructure gaps, particularly for smaller projects and social infrastructure, and to the development of the financial sector which is under-serving all but largest businesses.”
According to CEO GuarantCo LasithaPerera, PCEF is expected to support smaller scale power projects; logistics including storage, warehouses, industrial parks, pipelines, smaller port developments, etc.; secondary roads with some demand risk; hospitals; education; housing; waste water and water including desalination; local transportation; and inputs to infrastructure projects.
She further added, “”It is expected that the Pakistan Credit Enhancement Facility (PCEF) will enhance Pakistan’s capacity to attract and unlock latent pools of capital from pensions and insurance for infrastructure investment into key sectors of the country’s economy. GuarantCo has been active in Pakistan since 2013 as an international credit enhancement provider and is delighted to be part of this constructive partnership to establish a Pakistan-based credit enhancement facility as we have successfully done in Nigeria. In Pakistan, this facility will provide local currency guarantees for infrastructure projects making them bankable for commercial lending.”
Ali Sarfaraz CEO Karandaaz speaking on the occasion said, “We are happy to have partnered with this initiative. The Credit Enhancement Facility will help mobilize private investment in infrastructure, in order to increase service provision for the poor, boost economic growth and alleviate poverty. Similar facilities have been established in some of the world’s poorest countries.”
Karandaaz Pakistan also has been at the forefront to promote access to finance for SMEs through commercially directed investments and financial inclusion for individuals through promotion of digital financial services. They have also been working to develop and disseminate evidence based insights, and encourage innovation in financial space.