A loan of $196 million has been obtained by Habib Bank Limited (HBL) to expand its offshore operations and also to finance its energy projects. This loan was acquired from China Development Bank (CDB).
The bank is paying out the installments from December 2017 and has obtained the loan already. In six installments i.e. from December 2017 to June 2020 the principal amount will be paid and interest rate will be LIBOR + 2.45% which will be paid semi-annually from last year.
This loan was part of an agreement signed by the Chinese Bank to Pakistani bank and HBL will acquire more loans from the same bank in future.
An agreement of $500 million was signed between two banks in 2016, and according to this medium and long-term foreign currency financing will be provided to the financial institution.
$300 million will be provided by CDB for long-term financing of energy projects in Pakistan and $200 million will be for the offshore working capital financing of HBL.
HBL will also be able to provide foreign currency liquidity to project development in Pakistan, also to those that are under the China-Pakistan Economic Corridor (CPEC).
Habib Bank Limited is also the only bank in Pakistan that has branches in China in Urumqi and also in Gwadar, Pakistan. The bank is also actively pursuing prospects to leverage maximum opportunities of projects under CPEC.