ISLAMABAD, Aug 29: The finance division released on Wednesday an amount of $10 million to help promote venture capital and establish business incubators aimed at boosting the economic growth of the country.

“We have disbursed $10 million new assistance in the account of Competitive Support Fund (CSF) today (Wednesday) to help promote knowledge-based entrepreneurship, which is very necessary for our economy,” a concerned official told Dawn.

Through the new funding the CSF - a joint venture of the ministry of finance and the United States Agency for International Development (USAID) - will put its third window into operation to have three pilot business incubator projects to promote knowledge-based economy for a long-term economic growth, he added.

Initially, the official said, the venture capital and the setting up of business incubators would be promoted in the public sector. And once they proved successful, they would also be established in the private sector.

Responding to a question, he said that the government had allowed tax exemption in the venture capital business in the last two budgets but no investment came in this sector.

“But now with new financial and technical support of Pakistan and the USAID, such venture capital and business incubators are expected to be set up and promoted in the country,” the official said.

CSF has identified sectors that have potential and competitive advantage to grow as well as co-financing innovative projects based on a solid strategy to support a long-term economic growth in the country.

The CSF has three operational windows, namely the technical assistance, matching grants and business incubators/venture capital. It started with its third window, aiming to establish business incubators in the leading research institutions in Pakistan.

The technical assistance and matching grant windows of the fund are being supported by a grant of $12 million by the USAID, whereas the initiative of business incubators and venture capital will become operational by a matching grant of $10 million contributed by the government of Pakistan for the next 5 years.