AB disbursed $1.78 bn to Pakistan in 2020

ISLAMABAD:Asian Development Bank disbursed US$1.78 billion to Pakistan in term of loan and grant during the year 2020, comprising $1.1 billion in program lending and $680.7 million from project lending.

According to a member fact sheet issued by the ADB on the occasion of its 54th annual meetings on Tuesday, the ADB provided significant and rapid support to Pakistan’s coronavirus disease (COVID-19) pandemic response.

This included a $500 million loan under the bank’s COVID-19 Active Response and Expenditure Support Program to help the government deliver social protection programs. The funds were channeled through the government’s flagship poverty alleviation program, Ehsaas, to expand health sector capabilities and deliver fiscal stimulus to boost economic growth and create jobs, the factsheet added.

It added that the ADB also approved $2 million from its Asia Pacific Disaster Response Fund and $3 million through regional technical assistance to help Pakistan purchase personal protective equipment and other emergency medical supplies.

The bank and the Swiss Agency for Development Cooperation cofinanced $1 million to train 4,500 doctors and paramedical staff in COVID-19 critical care. ADB committed $300 million in emergency assistance and $5 million from Norway to strengthen Pakistan’s public health system and help meet the basic needs of the poor and vulnerable.

The bank also reallocated $30 million from the National Disaster Risk Management Project to support the country’s pandemic response, while the National Disaster Risk Management Fund allocated an additional $20 million from interest earned.

In other measures, ADB provided a $300 million policy-based loan to strengthen Pakistan’s finance sector, develop competitive capital markets, and encourage private sector investment. The bank also committed a $300 million policy-based loan to help promote macroeconomic stability by improving trade competitiveness and diversifying exports.

In Punjab, ADB signed an agreement to provide $8.32 million through its Project Readiness Financing Facility. The financing will enable vital preparatory work ahead of a series of major Punjab projects to enhance water availability and increase agricultural productivity.

ADB also provided technical assistance of $1.5 million to strengthen food security and post-pandemic resilience in agriculture, following an unprecedented locust infestation. ADB provided a $15 million loan to fund the preparation of spatial master plans, detailed engineering designs, operational business plans, and ensuring readiness ahead of the Punjab urban development projects.

In June 2020, ADB and the government signed a $75 million loan for the Sindh Secondary Education Improvement Project. The project signifies ADB’s strong commitment to re-engage with Pakistan in the education sector. A number of additional education projects are planned over the next 3 years, particularly in technical and vocational education and training. ADB raised 1.83 billion Pakistan rupees ($11.4 million) in local currency bonds.

The rupees-linked offshore bond will enable ADB to extend local currency loans to boost to private sector development in Pakistan.

As a catalyst for private investments, ADB provides financial assistance to nonsovereign projects and financial intermediaries. Total commitments in loans and equity investments from ADB’s own funds in 2020 amounted to $1.4 billion for 38 transactions in economic and social infrastructure, finance sector, and agribusiness.

ADB also actively mobilizes cofinancing from commercial and concessional sources. In 2020, ADB mobilized $1.9 billion of long-term project cofinancing and $3.3 billion of cofinancing through its Trade and Supply Chain Finance Program and Microfinance Program.

Total outstanding balances and commitments of nonsovereign transactions funded by ADB’s own resources stood at $14.3 billion as of 31 December 2020. Total outstanding balances and commitments of ADB’s nonsovereign transactions in the country as of 31 December 2020 was $497.1 million, representing 3% of ADB’s total nonsovereign portfolio.

The ADB factsheet said that Pakistan was a founding member of the Asian Development Bank (ADB) in 1966. ADB has since committed over $36.31 billion to promote inclusive economic growth and improve the country’s infrastructure, energy and food security, transport networks, and social services.

Aligned with the Government of Pakistan’s development vision, ADB’s new country partnership strategy, 2021–2025 focuses on three priorities: improving economic management, building resilience, and boosting competitiveness and private sector development.

Since 1966, ADB has committed $34.36 billion in sovereign loans, $150.5 million in grants, $1.01 billion in nonsovereign financing, $203.7 million in technical assistance projects, and $591 million in ADB-administered cofinancing for Pakistan.

Cumulative loan and grant disbursements to Pakistan amount to $26.96 billion. These were financed by regular and concessional ordinary capital resources, the Asian Development Fund, and other special funds.