KARACHI: The State Bank of Pakistan (SBP) has prescribed a standardised mechanism to monitor the required exports of existing as well as new projects under Long Term Financing Facility (LTFF).

The SBP said on Thursday that to streamline the procedure for financing new projects and the BMR (balancing and modernisation) of existing projects has been devised under a standardised procedure.

Under LTFF, participating financial institutions (PFIs) can provide long-term local currency finance for imported and locally manufactured new plants and machinery to be used by the export-oriented projects.

The facility will be available to the export-oriented projects with at least 50 per cent of their sales constituting exports or if their annual foreign sales are equivalent to $5 million, whichever is lower.

The SBP said the financing under LTFF will continue to be available at the mark up rates as mentioned in July and October 2015.

The maximum period for which such financing can be availed will not be more than 10 years, including a maximum grace period of 2 years. Where financing is provided for up to five years, the grace period cannot exceed one year.

Only new plant, machinery and equipment to be used by the export-oriented projects for producing exportable goods will be eligible for this financing. The core categories are textile and garments (spinning and ginning, fabrics, garments, made-ups, towels, art silk and synthetic textiles), rice processing, leather and leather products, sports goods, carpets and wools and surgical instruments.

Published in Dawn, June 29th, 2018