Govt backs private financing for agricultural storage projects

ISLAMABAD: Finance Minister Muhammad Aurangzeb said on Thursday that the government was committed to promoting private sector-led financing models to tackle long-standing structural problems in the agriculture sector, as he launched the Agri-Storage Portfolio Financing Facility in the capital.

The new facility, led by InfraZamin Pakistan, is intended to strengthen agricultural value chains and help reduce post-harvest losses. According to details shared at the launch, the programme carries no sovereign guarantee. Instead, InfraZamin is providing a credit guarantee mechanism aimed at lowering risk for private investors and encouraging longer-term investment in agricultural storage infrastructure.

Once fully rolled out, the facility is expected to mobilise as much as Rs7.1 billion in private capital for storage-related investment in farming areas across Pakistan. This includes Rs5 billion in debt and Rs2.1 billion in equity. The programme is backed by Rs2.5 billion in principal credit guarantee coverage from InfraZamin, equal to 50 per cent of the principal amount.

The financing will be used for the renovation, upgrading and construction of agricultural warehouses, silos and cold storage facilities nationwide. The initiative is being implemented in partnership with Pak Brunei Investment Company Ltd, Faysal Bank and the Bank of Punjab, which will extend the facility to their corporate and SME clients.

Storage expansion and expected impact

Under its social impact financing framework, the programme is linked to measurable outcomes. Over the next two years, it is expected to create or upgrade more than 300,000 tonnes of storage capacity for wheat, grains, fruits and vegetables across the country.

Officials said the planned investment would help address major shortages in storage infrastructure, cut post-harvest losses and improve farmers’ access to better market opportunities. The programme is also expected to support higher and more stable incomes for farmers.

According to the details presented at the event, the initiative is also expected to create livelihood opportunities closer to production areas, which could ease pressure from rural-to-urban migration. Broader social effects outlined for the programme include higher household spending on health, education and overall wellbeing.

The facility is also expected to generate direct and indirect employment across the agricultural value chain, including warehousing, logistics, transport, storage management, agri-processing and trading. It is also expected to support growth in related sectors such as packaging, cold-chain logistics, construction, financial services and agricultural inputs.

Officials and bankers outline support

InfraZamin Pakistan Chief Executive Maheen Rahman said the facility would help unlock substantial private investment in agricultural storage in rural and semi-rural areas for different types of produce. Bank of Punjab CEO Zafar Masud, Pakistan Banks Association Chairman Yousaf Hussain, Faysal Bank Ltd CEO Amir Shamim and other participants also spoke at the launch ceremony.