ISLAMABAD: A meeting of the Economic Coordination Committee (ECC) of the Cabinet on Tuesday approved a summary on Infrastructure Finance Policy 2017 with comprehensive vocabulary having four broad parameters.
Finance Minister Ishaq Dar had called a single-point meeting of the ECC to ‘consider and approve the Infrastructure Finance Policy Pakistan 2017,’ said an official statement.
Under the said policy a sound and long-term infrastructure finance framework has been provided that caters to both demand and supply side of finance and it is designed to attract Foreign Direct Investment (FDI) and mobilise private financing for public infrastructure, the statement claimed.
Following is the full text of the summary on Infrastructure Finance Policy Pakistan 2017 approved by the ECC that also explains the quality of official summaries to the forum.
“Pakistan’s economy is on the rise in the wake of sustained economic reforms agenda implemented since 2013. After having achieved macroeconomic stability in the first three years, the government is now focused on attaining higher sustainable and inclusive growth”.
The GDP growth last year was 4.7 per cent which was the highest in the last eight years, the summary noted.
To carry the growth momentum further and to meet country’s infrastructure needs, the government supports the expansion of infrastructure both directly through public sector investment and indirectly by facilitating private sector investment and finance.
It said the available public finances are not sufficient for funding such infrastructure projects which need to be augmented by mobilising finances and attracting investment from the private sector.
In this regard, development of a sound, long-term infrastructure finance policy that caters to both the demand and supply sides, and that is designed to attract FDI and mobilise private financing for public infrastructure, is a critical piece of the overall strategy and will be crucial to sustain the current investment level, the summary explained to the ECC.
“Accordingly, a policy framework for financing of infrastructure projects had been developed in consultation with the key stakeholders. The policy seeks diversification of financing sources and strengthening of key institutions for mobilising of private investment in infrastructure sector,” the summary claimed without any elaboration.
It said the policy proposed an action plan that was not part of the summary but aims to address the country’s long-term infrastructure financing requirements through the following four measures.
These include “efficient policy framework for infrastructure finance, good practices framework for infrastructure projects, enhance financial intermediation to support infrastructure investment and strengthening the development finance framework”, the summary concluded, adding the input/views also came from ministries of Planning, Petroleum, Communication, Water and Power, Railways, Aviation, the State Bank and the Securities and Exchange Commission of Pakistan.
The official statement issued after the policy envisaged phase-wise intervention in these areas to increase the quantum of infrastructure financing flows. It claimed the policy was intended to have particular focus on infrastructure sub-sectors more suited to private sector investment and finance namely transportation facilities (like ports, terminals, airports, railways, water-ways and toll roads), energy (oil and gas, thermal, hydro and other renewable power infrastructure) and telecommunications (eg fibre optics).
“The finance minister hoped that the approval of the policy would help the government to increase infrastructure investments. It would facilitate and increase the role of the private sector in the infrastructure development structure,” the statement concluded.
Published in Dawn, February 1st, 2017