South Asia: Best Bank for BRI-related Financing in the Region 2020
Under its president and chief executive Muhammad Aurangzeb, Habib Bank has been transformed. It is among the most important non-Chinese banks – with Citi, Standard Chartered and HSBC – involved in the construction of the long and winding Belt and Road.
Since the early days of the BRI, Habib Bank has been integral to the construction of a host of big-ticket projects, from power grids to telecoms towers to potash plants, along the $60 billion China-Pakistan Economic Corridor, a key BRI branch-line that stretches from China’s far west to the Indian Ocean at Gwadar.
In December, Habib Bank extended its reach and presence in China, when it secured a full operating licence for its Beijing branch. It is also the only Pakistan lender with an onshore settlement capability – little wonder so many state-run mainland firms call on it when they are seeking to buy assets in south Asia and the Middle East.
These days, Habib Bank’s China team is a lean, sleek machine. Its 20-plus Chinese and Pakistani bankers operate out of four offices – Islamabad, Lahore, Karachi and Gwadar – serving upward of 250 mainland companies and 8,000 individual accounts.
Once again it has been busy over the past year. The bank attended the second Belt & Road Bankers Roundtable in Beijing in April 2019, and was the main sponsor of the latest Gwadar Expo, held in the port city a month before that.
Its capital markets team was there when China Gezhouba Group wanted to sell a minority stake in Suki Kinari, one of the country’s largest hydropower projects. And they were on hand when local firm Indus Wind Energy sought to secure funding to build two 50-megawatt wind-power projects.
There are precious few BRI projects that Habib Bank is not involved with in Pakistan. Funding the projects that make the Belt and Road whirr and tick is Habib Bank’s bread and butter. The Karachi-headquartered lender is never anything but busy, and for good reason.
It has financed two 330-megawatt coal-power projects, run by local firms ThalNova Power Thar and Thar Energy. Each costs upward of $500 million, and Habib Bank is working as financial adviser, intercreditor agent and security trustee to both.
Two other projects stand out from the crowd over the last 12 months. The first is the $216 million expansion of Sindh Engro’s coal mining operations in central Pakistan, which is being funded by a mixture of local currency financing and foreign equity financing. Habib Bank is the lead structuring agent on the project, and spearheaded the whole of the financing process.
The second involves the construction of two 50-megawatt wind power projects, both of which are owned and operated by another local firm, Indus Wind Energy. Habib Bank is working as exclusive local currency mandated lead arranger, facility agent, foreign currency lender, and onshore security trustee of the projects, which will add a further renewable element to Pakistan’s energy mix.