ISLAMABAD, Dec 13: Pakistan has completed negotiations with multilateral agencies for $1.47 billion loans out of the $3.984 billion pledges and asked international institutions to lend their experts on secondment for reconstruction and rehabilitation of the areas devastated by the October earthquake.
Advisor to the Prime Minister on Finance Dr Salman Shah told a news conference on Tuesday that negotiations had been finalized with the World Bank for $870 million, Asian Development Bank for $300 million and the Japan Bank for International Cooperation for $300 million loan.
The boards of directors of the World Bank and the ADB were expected to approve the loan packages by Dec 15, he said. The loans were based on soft terms, he said.
The World Bank would charge 0.75 per cent service charges on its loans repayable over 35 years and the ADB would charge about one per cent interest on its $220 million loans repayable in 40 years, he said.
He said total international financial pledges had increased to $6.3 billion and offers were still coming in. This comprised $3.984 billion in loans and $2.341 billion in grants, he said.
Of the grants, about $1.2 billion were for the early relief activities and most of these would be used directly by the donors for project financing, he said.
Dr Shah said the government had requested international agencies like USAID, the DFID of the UK, the ADB and the World Bank to send their experts to the country on secondment basis to design and help implement rehabilitation and reconstruction activities in the earthquake-hit areas.
He, however, parried questions as to how the government could utilize additional resources more than double of its existing public sector development programme funds when a major part of the annual PSDP funds remained unutilized because of capacity limitations.
Dr Shah said the government had decided in consultation with the donors to strengthen the capacity of the Earthquake Recovery and Reconstruction Authority on top priority through induction of civil servants and private sector consultants.
Responding to a question on impact of additional loans for earthquake rehabilitation on the fiscal responsibility and debt limitation law and their mandatory approval from parliament, Minister of State for Economic Affairs Hina Rabbani Khar said the government was well within debt limitation prescribed by the law.
