Pakistan has opened a new channel for foreign currency financing after the International Finance Corporation (IFC) and Bank Alfalah Limited signed an agreement for the country’s first Diversified Payment Rights (DPR) program.

The initial transaction under the program is expected to provide up to $100 million in foreign currency financing.

The Project Agreement was signed at the Finance Division in Islamabad on August 20 in the presence of Finance Minister Senator Muhammad Aurangzeb. IFC Regional Industry Director Momina Aijazuddin and Bank Alfalah President and CEO Atif A. Bajwa signed the agreement.

Under the DPR structure, financing is raised against eligible future foreign currency payment flows. The mechanism is expected to give Pakistan another avenue for obtaining foreign currency and help broaden access to international capital markets.

The first transaction will target financing of up to $100 million. If market conditions remain favorable and the initial transaction performs well, the structure could support further financing and attract international institutional and private investors.

Finance Minister Muhammad Aurangzeb said the initiative involved regulatory, policy and technical coordination among the Finance Division, State Bank of Pakistan, IFC and Bank Alfalah.

He stressed the importance of diversifying foreign currency funding sources and developing a pipeline of projects that require financing in foreign currency.

The new structure could also eventually be adopted by other Pakistani banks, subject to regulatory approvals, market conditions and the outcome of the initial transaction.

Senior officials from the Finance Division, IFC, Bank Alfalah and the State Bank of Pakistan attended the signing ceremony.