ISLAMABAD: International Finance Corporation (IFC), a member of the World Bank Group, is providing a $35 million Sharia compliant financing package to Engro Polymer & Chemicals Limited (EPCL), Pakistan’s only integrated chlor-vinyl chemical complex, to support capacity building, boost production, and help create new jobs.
The financing package, structured as an Ijarah Islamic finance facility, will help the company increase efficiency and increase the production of Polyvinyl Chloride (PVC), in particular, and caustic soda flakes, according to a statement issued on Thursday.
This will help boost growing downstream sectors such as construction, housing, consumer goods, and agriculture, which will also increase business for local suppliers.
This investment will also help the development of associated local industries, creating new job opportunities while the expected efficiency improvements will result in decreased carbon dioxide emissions.
“IFC’s investment will help us continue to innovate and increase production of sophisticated chemicals like PVC, which have a high multiplier effect on other sectors in addition to saving precious foreign exchange for the country,” said Imran Anwer, EPLC CEO.
“It will also help us in our aim to become more resource- and energy-efficient, which will ultimately make us more competitive, both in Pakistan and beyond.”
Engro Polymer is part of Engro Corporation, one of the largest conglomerates in Pakistan. Its diverse portfolio includes operations in fertilizers, foods, chemical storage and handling, trading, energy and petrochemicals. IFC has been investing in various Engro group businesses since the early 1990s.
“Engro Polymer’s success highlights the potential of the private sector to build capacity and transform industries through the adoption of better technology and standards,” said Nena Stoiljkovic, IFC Vice President, Asia and Pacific.
“This investment will send a strong market signal on the positive outlook for the chemical sector, while also showcasing Pakistan’s promise to mitigate climate change.”
The financing is part of IFC’s broader strategy in Pakistan to support local producers, drive inclusive growth, and create jobs. As of fiscal year 2018, IFC’s total commitments in the country stood at around $1.195 billion.
IFC’s work is part of the World Bank Group’s Country Partnership Strategy for Pakistan, which aims to support private sector development in sectors with the potential for a high multiplier effect, leading to economy-wide productivity gains, job creation, and poverty reduction.