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Pakistan to get $4.7bn under Asian Development Bank’s new business plan

Updated November 15, 2017

ISLAMABAD: The Asian Development Bank (ADB) has unveiled a new country operations business plan for Pakistan for 2018-20 with indicative resources available amounting to $4.673 billion in loans in energy, transport, agriculture, water, public sector management, finance and social sectors.

Of this amount, loans worth $3.39bn will come from regular ordinary capital resources and $1.28bn from concessional lending. Being a group ‘B’ developing member country, Pakistan is eligible for ordinary capital resources and concessional lending.

However, the final allocation of the loans by year and sector will depend on available resources and outcomes of the country performance assessments, according to the business plan document made available to Dawn on Tuesday.

These resources will be supplemented by ADB’s non-sovereign operations subject to headroom constraints, as well as by official and commercial co-financing. Funding from other sources, including the regional pool set-aside under concessional and ordinary capital resources for regional cooperation and integration, will also be explored.

In the energy sector, the 2018-20 country plan includes a new $1bn multi-tranche financing facility for the hydropower development investment programme, which focuses on clean energy and hydropower generation.

The two ongoing multi-tranche financing facilities will continue to support infrastructure development for power transmission and distribution. The projects will deploy transmission systems that will accommodate more intermittent renewable energy and improve resilience to climate change.

Includes two new projects one each for Sindh, Punjab

In transport sector, the the three-year plan includes sustainable national highway project; Hyderabad southern bypass project and additional financing for Khyber Pakhtunkhwa provincial roads project. ADB is supporting the development of a national transport policy and master plan; Pakistan Railway strategic plan; and national road safety action plan for improved road asset management.

Projects in agriculture sector include remodelling of link canals in Punjab; KP climate resilient water resources development project; Noulong multi-purpose development project; Cholistan water resource development project in Punjab; and Balochistan water resources development project.

The country plan also includes a technical assistance loan for Punjab water resources. These projects will promote water resources infrastructure and management in arid and semiarid areas, rehabilitate and upgrade the Indus Basin irrigation infrastructure, and establish new, non-perennial irrigation systems.

In the area of water and other urban infrastructure and services sector, the ADB will continue supporting Pakistan’s priorities in urban infrastructure, including urban transport and institutional development. The new demand-driven information and communications technology project will develop a pilot information technology park and test smart urban solutions.

In public sector management, the country plan includes allocation for policy-based lending for trade and competitiveness; infrastructure financing; and social protection. The enhancing public–private partnerships project is designed to support investments by providing viability gap funds, project development facilities, and support for institutional strengthening by improving public– private partnership transactions.

An investment in the Pakistan Infrastructure Development Fund is envisaged to support long-term project finance. The National Disaster Risk Management Fund will enhance Pakistan’s resilience and response to climatic and other natural hazards.

The 2018-20 business operations plan includes two new projects: Sindh education sector improvement project; and improving workforce readiness in Punjab. It also includes policy-based lending for strengthening KP health system.

Additionally, the ADB will provide technical assistance across sectors to generate and disseminate knowledge to support policy and project development, and enhance project quality and readiness.

The ADB country operations business plan is aligned with the country partnership strategy (2015-19) which supports the government’s objective of high, sustained and inclusive growth. It is also aligned with the government’s development strategy ‘Vision-2025’ and the development plans of the provincial governments.

Published in Dawn, November 15th, 2017