Circulars/Notifications / Infrastructure, Housing & SME Finance Department  

 IH&SMEFD Circular No. 1 of 2020
March 17, 2020

The Presidents/ Chief Executives,
All Banks/DFIs


Dear Sir/Madam,

Temporary Economic Refinance Facility (TERF)

In order to support sustainable economic growth especially in the backdrop of challenges being faced by the industry in post-pandemic scenario, State Bank of Pakistan (SBP) has introduced Temporary Economic Refinance Facility (TERF). The facility will provide concessionary refinance for setting up of new industrial units. Refinance under the facility will be available through banks/DFIs to all sectors across the board except power sector where SBP’s refinance facility for renewable energy projects already exists. Salient features of the scheme are as under:
  1. Scope & Eligibility Criteria: Long term finance facility for purchase of new imported and locally manufactured plant & machinery for setting of new projects
  2. Maximum limit: Rs. 5 billion per project
  3. Tenor: 10 years including grace period up to 2 years
  4. End User Rate: Maximum 7% p.a. (SBP rate of refinance will be 3%)
  5. Repayment of finance: Quarterly/ half-yearly basis
  6. Validity of the facility: LCs/ILCs established from the date of announcement of the scheme till 31st March, 2021 will be eligible for the TERF

2. The facility shall be available with immediate effect. Borrowers are advised to approach their concerned bank/DFI for availing financing under the facility. Details of the facility along with required documents are attached herewith.


Annex-I: Temporary Economic Refinance Facility (TERF)

Annex-II: Documents for Temporary Economic Refinance Facility (TERF)


Yours sincerely,

(Dr. Mian Farooq Haq)


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