ISLAMABAD: The World Bank has approved financing worth $1.02 billion using three different financing instruments to support the deepening of Pakistan’s economic reforms and to strengthen the capacity of Sindh to deal with natural disasters.

The Competitiveness and Growth Development Policy Financing (CGDPF) will support the government’s efforts to encourage economic growth and investment for reducing poverty and building shared prosperity, the World Bank resident mission announced here on Wednesday.

The CGDPF, to be financed from the International Development Association (IDA), will provide $920 million in budget support to improve the business environment and strengthen fiscal management. The financing combines a credit of $500m and a World Bank guarantee of $420m.

“The government has made significant progress in stabilising the economy, initiating reforms for revenue mobilisation and drawing in the private sector for spurring growth,” says Illango Patchamuthu, the World Bank Country Director for Pakistan.

“It is now stepping up efforts through deeper reforms and an accelerated pace of implementation. This will improve the competitiveness of the economy, which in turn will create more and better jobs, lifting millions out of poverty,” he said.

The World Bank guarantee is an innovative instrument that will support Pakistan’s access to international markets to meet its budgetary financing needs. The World Bank will guarantee up to $420m of financing to be raised by Pakistan, improving the terms under which the Government of Pakistan accesses international financing, and freeing domestic resources for private sector investment.

“The operation will support reforms that contribute towards accelerating growth and fostering an inclusive growth pattern,” says Enrique Blanco Armas, Task Team Leader of the Project.

Sindh Resilience project of $100 aims to reduce flood and drought risks in selected areas and to strengthen the province’s capacity to manage natural disasters.

“The project would contribute to reduction in vulnerability and risk in Sindh through a combination of physical works, strengthening fiscal resilience, and institutional development activities,” says Haris Khan, Task Team Leader of the project.

An estimated 5m people, including both urban and rural populations, will be directly protected from frequent river flooding events. In addition, an estimated 65,000 people who are currently exposed to drought and food insecurity, will also be directly benefitting from the construction of small dams for rain water harvesting and recharging of groundwater aquifers.

Published in Dawn, June 23rd, 2016