Pakistan launches PKR 7.1 billion facility to expand agricultural storage infrastructure

Pakistan launched a PKR 7.1 billion social impact financing facility to expand and upgrade the country’s agricultural storage infrastructure, with officials saying the initiative will reduce post-harvest losses, improve food security and enhance farmers’ access to finance.

The facility was launched by InfraZamin Pakistan in partnership with The Bank of Punjab, Faysal Bank Limited and Pak Brunei Investment Company Limited.

Speaking at the signing ceremony, Adviser to the Finance Minister Adnan Pasha described the initiative as a major step forward for Pakistan’s social impact financing market, saying it would strengthen agricultural value chains and attract private-sector investment into critical infrastructure.

“This is a very important opportunity for Pakistan,” Pasha said. “The launch of a PKR 7.1 billion facility linked to social impact reflects the growing momentum behind innovative financing solutions that address real economic challenges while improving livelihoods and creating opportunities across the country.”

Private-sector-led financing

Pasha said the facility marks Pakistan’s second major social impact financing transaction after the launch of the PKR 1 billion Pakistan Skills Impact Bond in December 2025.

He said the transaction is being led by private-sector institutions and does not involve a sovereign guarantee from the government. Instead, InfraZamin will provide a partial credit guarantee mechanism designed to reduce investment risk and encourage lending.

Under the structure, the Agri-Storage Portfolio Financing Facility will mobilize up to PKR 7.1 billion, including PKR 5 billion in debt financing and PKR 2.1 billion in equity investment. The facility is backed by a PKR 2.5 billion credit guarantee from InfraZamin, covering 50% of principal exposure.

The financing will support the construction, expansion and rehabilitation of warehouses, grain silos and cold storage facilities across Pakistan.

Expanding storage capacity

Officials said the program is expected to create or upgrade more than 300,000 metric tons of storage capacity over the next two years.

Pasha said improved storage facilities would help farmers reduce wastage, preserve produce for longer periods and access better market prices.

“When farmers have access to safe and reliable storage facilities, they can better manage their produce, access financing against stored commodities and ultimately earn higher and more stable incomes,” he said.

He added that the initiative would complement the State Bank of Pakistan’s Electronic Warehouse Receipt financing framework and support the government’s Zarkhez-E program, which provides collateral-free loans to smallholder farmers.

Economic and social impact

Officials said the project is expected to generate employment in warehousing, logistics, transportation, agricultural processing and commodity trading.

Pasha said investment in storage infrastructure would also stimulate activity in packaging, construction, cold-chain logistics, financial services and agricultural input sectors while strengthening rural economies.

“The ultimate objective is to create positive social impact,” he said. “Improved storage infrastructure will reduce losses, strengthen rural incomes, enhance food security and contribute to the overall uplift of farming communities.”

Growing agricultural finance

Highlighting progress in agricultural lending, Pasha said financing disbursements to the sector reached about PKR 3.1 trillion during the current fiscal year, while outstanding agricultural credit stood at PKR 1.2 trillion, reflecting annual growth of about 24%.

He said about 3.1 million farmers are currently benefiting from agricultural finance and the government aims to extend access to an additional 1.5 million farmers in the next fiscal year.

Pasha also called on more banks and financial institutions to participate in impact-financing initiatives linked to the real economy.

Minister’s statement

In a message shared at the event, Finance Minister Muhammad Aurangzeb said the project reflects the government’s commitment to encouraging innovative financing structures that mobilize private capital for development objectives.

“This initiative reflects the government’s commitment to encourage private-sector-led innovative financing solutions linked to impactful outcomes that address structural challenges in Pakistan’s agriculture sector,” he said.

The facility emerged from deliberations of the Social Impact Financing Committee, chaired by the finance minister, and the Ministry of Finance-led Task Force on Social Impact Financing.

InfraZamin Chief Executive Officer Maheen Rahman said the facility would unlock significant private investment for agricultural storage infrastructure and strengthen the resilience of Pakistan’s agricultural sector.

Bank of Punjab President and Pakistan Banks Association Chairman Zafar Masud stressed the need to strengthen the Electronic Warehouse Receipt ecosystem to support broader agricultural financing.

Faysal Bank President and CEO Yousaf Hussain said improved storage infrastructure is critical to reducing post-harvest losses and improving efficiency across agricultural supply chains.

Pak Brunei Investment Company Chief Executive Officer Amir Shamim said agri-warehousing remains a key component of food security and value preservation and reaffirmed the institution’s support for structured financing solutions in the sector.