ADB lending to double this year

October 10, 2019

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ISLAMABAD: The Asian Development Bank (ADB) will provide $2.5 billion financing to Pakistan during the current fiscal year — higher by almost 131 per cent over last year’s $1.08bn.

The Manila-based lending agency announced through its Twitter account on Wednesday that besides providing $2.5bn approved financing to Pakistan in 2019, the recently approved Country Operations Business Plan (COBP) 2020-22 will increase average lending to $2.4bn a year – a record 71pc rise over the $1.4bn average from 2015-2018.

In addition, ADB will leverage its lending through the mobilisation of co-financing and funding from other sources, including regional concessional resources. “The new COBP will support Pakistan’s development goals and complement efforts by other development partners,” ADB said.

It said the Pakistani government worked with ADB to strengthen the country’s key infrastructure, boost social and environmental safeguards, and promote information sharing with other countries.

As such, the ADB’s COBP (2019-22) for Pakistan is aligned with its Country Partnership Strategy (CPS) 2015-19, Strategy 2030 and “Pakistan Vision 2025”.

Sectors supported include irrigation and water resource management, education, health, energy reforms, trade, competitiveness and financial sector development, transport sector development and urban and cities

According to the ADB, it has provided a total of $6.4bn to Pakistan over the last four years, starting with $1.42bn in 2015 followed by $1.79bn in 2016. This was raised to $2.13bn in 2017 before scaling it down to $1.079bn in 2018.

In contrast, the total ADB funding to country over the next four years is put at $9.023bn. This would precisely include $2.491bn in the current year and $2.48bn in 2020, before climbing down to $2.03bn in 2021 and then finally to $2.59bn in 2020.

In the energy sector, ADB has allocated about $2.245bn loan financing, accounting for 30pc of the total pipeline for 2019–2021. It includes a multi-tranche financing facility for Transmission Streng­thening (tranche 1) for National Transmission and Despatch Com­pany (NTDC), Hydropower Devel­opment Project for Water and Power Development Authority (Wapda) and support for the Turkmenistan-Afghanistan-Pakistan-India Gas Pipeline Project.

Another $1.394bn loan facility has been set for transport sector, about 18.5pc of the total pipeline. This includes the Sustainable National Highway and the Sindh Hyderabad Southern Bypass. ADB has also proposed support for the revitalisation of Pakistan Railways to improve transport sector sustainability, including exploring non-conventional financing arrangements.

An allocation of $794 million or 10.6pc of the pipeline is set for agriculture, natural resources, and rural development. The pipeline includes the Greater Thal Canal Irrigation Project, the Kurram Tangi Water Resources Project, and the Smaller Cholistan Water Resources Development Project.

About $479m (about 6pc) have been allocated to water and other urban infrastructure services. The pipeline includes a cross-sector project readiness facility for Punjab as well as Punjab Cities Improvement Project.

The ADB has also allocated $2.4bn in loan financing to finance and public sector management that comes out at 32pc of the total pipeline. The COBP (20192021) includes new schemes in the Trade and Competitiveness Programme, phase-1 in 2019, Financial Markets Development in 2020, Infrastructure Financing and Public Private Partnerships in 2021 besides the second phase of Support for the Benazir Income Support Programme in 2020.

Moreover, $225m would also be available to education and health. ADB’s reengagement in the two sectors include $175m for projects on secondary education in Sindh and improving workforce readiness and skills development in Punjab and $50m to improve the quality of healthcare services in Khyber Pakhtunkhwa.

Published in Dawn, October 10th, 2019