WB to give $1bn loan on lowest interest rate: Pakistan termed star performer
By Ihtasham ul Haque
ISLAMABAD, April 30: The World Bank will offer highly concessional assistance to Pakistan totalling one billion dollar by June 30 this year.
“Pakistan has been a star performer and that is why the World Bank, for the first time, plans to extend one billion dollar on an unprecedented low interest rate,” said Acting Country Director of the World Bank in Pakistan, Mr Abid Hussain.
He told reporters here on Tuesday at the end of a two-day Pakistan Development Forum (PDF) held in Paris, that the World Bank’s board was expected to meet in Washington on June 11 to approve six International Development Agency (IDA) loans worth one billion dollar.
Abid said that IDA loans will be offered just at 0.75 per cent service charges and, “I tell you that Pakistan is the first country in the world to be offered this new one billion dollar funding on almost zero mark-up rate because of trying to implement a reform agenda”.
He said that 500 million dollar will be offered as part of the Structural Adjustment Credit (SAC-2). This loan, he said, will be extended for 35 years with 10 years’ grace period and will be disbursed in single instalment to help improve the balance of payment position.
He said that 300 million dollar will be extended for Banking Sector Adjustment Loan.
Abid said that 90 million dollar Structural Adjustment Loan will be extended to the Sindh government. Similarly, 75 million dollar Financial Adjustment Credit will be offered to the NWFP, he added.
“Twenty-five million dollar are being lined up for the State Bank of Pakistan as part of the technical assistance,”, Abid Hussain said. He added that 20 million dollar will be disbursed to Azad Kashmir government for a community development project.
Finance Minister Shaukat Aziz, who was also present on the occasion, said the World Bank loaning was becoming softer and softer and it was greatly helping the government to revive the economy.
He said that international donors were fully supporting the country’s home-grown economic reform programme. He said a lot of funds were being spent on poverty alleviation.
The finance minister said the World Bank, the IMF and the Asian Development Bank (ADB) were extending adequate financial support to Pakistan. The IMF had approved 1.3 billion dollar Poverty Reduction Growth Facility (PRGF), while the Asian Development Bank had committed roughly one billion dollar for the calendar year 2002. And now the World Bank was about to offer one billion dollar.
“Donors are not doing any undue favour to Pakistan. What support they are extending is because of good performance shown by the present government,” the acting country director of the World Bank said.
