State Trading Organization (STO) has signed a USD 175 million [MVR 2.7 billion] Murabaha trade financing agreement with International Islamic Trade Finance Corporation (ITFC).
STO's Managing Director Hussain Amr signed the agreement on behalf of STO during the Islamic Development Bank (ISDB)'s annual meeting in Egypt. CEO Hani Salem Sonbol signed the agreement on behalf of ITFC. Finance Minister Ibrahim Ameer also attended the meeting.
The ITFC has been providing the facility to STO annually in recent years. Last year, USD 75 million was allocated for the facility.
Under the ITFC's Murabaha facility, ITFC will purchase the essential commodities required by STO and sell them to STO with a profit. An Islamic financing model, the facility will be mainly utilized to buy basic food items, fuel, and medical supplies.
The government's largest company, STO, posted a net profit of MVR 186 million last year. The ITFC facility amount has been increased this year in view of STO's improved financial situation.