KARACHI: Habib Bank Limited (HBL) and the China Development Bank (CDB) signed on Monday a $500 million accord, the first such agreement between a Chinese and a Pakistani bank under which medium- and long-term foreign currency financing will be provided to a local financial institution.

The accord is “a follow-up to the framework agreement signed between CDB and HBL during the historic visit of President Xi Jinping to Pakistan in April 2015”, HBL said in a statement.

CDB Chairman Hu Huaibang and HBL Chairman Sultan Ali Allana witnessed the signing of the agreement by CDB President Zhao Yaozhong HBL President Nauman Dar.

Under the agreement, the CDB will provide $300m to HBL for long-term financing of energy projects in Pakistan and $200m for offshore working capital financing needs.

It will also allow HBL to provide much-needed foreign currency liquidity to finance the development of projects in Pakistan, including those under China-Pakistan Economic Corridor.

HBL announced earlier this month it had received a licence to open a branch in China, a move that would make it the first South Asian lender to operate in the world’s second-largest economy.

Published in Dawn, April 26th, 2016