ISLAMABAD: The Asian Development Bank (ADB) has agreed to enhance its annual lending to Pakistan to about $2 billion over the next three years, from presently less than $1.5 billion, subject to speedy readiness of project designs and procurement.

Speaking to journalists after his meetings with the Finance Minister Ishaq Dar and the chief minister of Punjab, the Bank’s Vice President Wencai Zhang said Pakistan had requested an increase in its financing flows to more than $2.5bn.

He said that he is here for finalisation of the three-year Country Partnership, Strategy and Operation Plan for 2018-21 under which the ADB would continue to support infrastructure projects in transport and railways, including interconnection facilities with the neighbours including South Asia, Central Asia and South-East Asia.

He said the government wanted the ADB ‘to deliver funds more than $2.5bn’ per annum but depending on finalisation of projects the annual funding to the country would range between $1.8-2.1bn, depending on the processing time of the projects.

Mr Zhang said the ADB will also continue to work for reforms in the public sector entities and energy sector reforms, particularly in transmission and distribution network and energy efficiencies.

He added that the Bank is now looking with greater interest at the urban transport system and has recently approved $335m for Peshawar Bus Rapid Transport Project in collaboration with other international lending agencies and is examining to enter more transportation projects starting with Punjab.

A new area of interest for the ADB is the urban water and sanitation projects as part of integrated water management systems as a move on to financial inclusiveness through Public-Private Partnership, starting with a project in Sindh and then in Punjab.

He said the ADB was also exploring how it could increase its support for social sectors particularly in technical and vocational education for skill development of the youth and secondary health sector.

Responding to a question, he conceded the project preparation and approval process had been a cause of project delays, cost over-runs and delay in achievement of intended results that also involved commitment charges but added the ADB was improving its procedures and wanted the government to also streamline its project design, procurement and approval processes.

He declined to comment if latest macroeconomic situation and transition to next government would need another IMF programme saying such a decision has to be taken by the government of Pakistan but added the country’s macroeconomic vulnerabilities had significantly reduced over the past few years.

He said the ADB was very much encouraged by government’s reform for higher growth after stabilization and should continue with real structural reforms to consolidate achievements as Pakistan needed even higher growth rates to 7 percent per year.

Mr Zhang confirmed that ADB had planned to make major contribution for development of main railway line (ML-1) from Karachi to Peshawar but was later told that Pakistan and China had decided at the bilateral level to make it part of the China-Pakistan Economic Corridor (CPEC) for chinese financing.

He said the ADB took up the matter with the ministry of railways which offered some other important projects as subsidiary lines to the ML-1. He said the two sides have agreed to discuss those subsidiary lines to work out projects but it was clear that ADB was no more part of the ML-1.

He sidestepped a question as to what success stories in the energy sector made the ADB to commit more funds and why its financing programmes were seen weakening the energy sector regulators instead of their strengthening but another official assisting him said the financial management, corporate governance and operational procedures had improved in the power sector but needed to be taken to the next level.

Published in Dawn, July 7th, 2017