ISLAMABAD, Jan 31: The International Finance Corporation (IFC) has decided to offer $30 million to the Lasmo Oil Pakistan Limited to develop Bhit Natural Gas Field in the Kirthar block in Sindh.

The IFC officials signed here on Thursday two agreements for financing the project, which included equity investment of about $1.6 million for Micro Finance Bank.

Peter Woicke, IFC Executive Vice-president and the Managing Director of the World Bank Group, said after the signing ceremony that both the projects would have a significant developmental impact in terms of realizing Pakistan’s energy potential.

Speaking at a joint news conference with Finance Minister Shaukat Aziz, Mr Woicke admitted that the IFC had not been very active during the last few years to provide lending to the private sector due to various governments’ control and irritants.

“But now these irritants are being removed by the present government and that is why we have decided to restart IFC financing to the domestic private sector.”

The IFC official dismissed the assertions that the IFC had not been active in the past due to some political reasons.

“We are apolitical organization, therefore, our lending is only on the basis of merit,” he said, adding that since the government in Pakistan was restructuring the power and cement sectors, the IFC would go for trade financing other than various projects to be set up by the private sector.

Mr Woicke observed that there also existed a lot of potential for the small and business enterprizes to have lending from the IFC. “Now private sector loaning is favourable.”

However, he stressed the need for mobilizing foreign investment, and said foreign investors had been very cautious due to the Sept 11 events and the situation along India-Pakistan borders.

He was of the view that if there was stability in the region, the IFC and other foreign investors would certainly like to invest in Pakistan.

The IFC official met President Pervez Musharraf, who briefed him about his government’s economic reforms’ programme, including the pace of privatization.

The finance minister said the president had informed Mr Woicke that investment climate was being improved in the country and that his government was trying hard to achieve economic stability by implementing reform agenda.

The president asked the IFC official to do more to help the private sector, specially by lending to the housing and construction industry of Pakistan.

“The implementation is a an important issue”, Mr Woicke said, adding that he was very happy to say that the reform agenda of the government was very impressive but there was a need to focus on the implementation aspect.

He hoped that the bureaucracy would play an effective role and would facilitate the private sector. “In the past, we were not overly happy over our equity investment”, he said and added that the IFC planned to play a pro-active role to support the country’s private sector.

Replying to a question, he said the IFC was not against Islamic banking and was unbiased over the issue. In fact, he added, a couple of IFC loans were made available under the Islamic mode of financing.

The finance minister hoped that since various irritants had been removed, the IFC would lend to the private sector, which was a real engine of growth. He said oil and gas sector, information technology, and export-oriented manufacturing industry could be extended loaning by the IFC.