ISLAMABAD: A day before its term completion and preparing for general elections, the government on Tuesday extended over Rs158 billion Kissan Package for another six months, approved a ‘single-entity’ export processing status to Frontier Works Organisation (FWO) in Waziristan for mineral exports and revival of modified SME Asaan Finance (SAAF) Scheme.

The decisions were taken at a meeting of the Economic Coordination Committee (ECC) of the Cabinet which also approved a ‘gradual sovereign guarantee’ for about $3.475bn worth of Chinese loan for a 1,200MW nuclear power plant, continuation of gas supply to two Punjab based fertiliser plants of Fatima Group till Oct 15 and issuance of a ‘State Support Agreement’ to provide financing comfort to prospective foreign operator of Islamabad International Airport set to be outsourced shortly.

The meeting of the ECC presided over by Finance Minister Ishaq Dar after discussion allowed an extension in time as per fiscal space available till Dec 31 to financing schemes of Kissan Package. These schemes, announced by the prime minister on Oct 31 2022, had legally expired on June 20 or are set to expire shortly.

The meeting was informed that disbursements under the schemes remained low due to a lack of awareness and banking procedures and their extension would have no fiscal implications except for one out of five — PM Youth Business & Agriculture Loan scheme required financial allocations.

ECC okays $3.4bn guarantee for Chashma-5, revives Asaan Finance Scheme

The ECC also approved a summary of the Ministry of Industries & Production regarding the North Waziristan District Single Entity Export Processing Zone to Degan Exploration Works — a subsidiary of FWO — which has two mineral and exploration leases in North Waziristan for base metal (copper) at Muhammad Khel and Manzar Khel. It was decided that the Mineral Lease located in Muhammad Khel for an area of 30 sq. km (ML–30) and the Exploration Lease located in Manzar Khel for area of 101 sq. km (EL-101) be declared as North Waziristan Single Entity Export Processing Zone under a special clause of the EPZA Ordinance 1980.

The ECC also approved the revival of the SME Asaan Finance (SAAF) Scheme which was launched in May 2021 to provide refinance and credit guarantee scheme for collateral-free lending to SMEs but was suspended by former finance minister Miftah Ismail on July 31, 2022for corrections by the State Bank. Under the revised scheme, end user markup would remain unchanged at 9pc but the partner banks’ margin has been reduced from 8 to 6pc and SBP’s margin increased from previous 1pc to 3pc.

The meeting approved a request of the Pakistan Atomic Energy Comm­ission (PAEC) regarding the issuance of GoP guarantee for Chashma Nuclear Power Project Unit-5 (C-5). The ECC decided to allow the issuance of a gradual sovereign guarantee for Chasma C-5 project within IMF programme. The meeting was informed that a final agreement was signed by PAEC and China National Nuclear Corpor­ation Overseas Ltd recently for setting up of 1,200MW plant at a total price of 25,080 million RMB (about $3.475bn) at an interest rate of 3pc, no Sinosure, capitalisation of interest during construction for eight years, no management fee and commitment fee for whole loan tenor. Of this contract price, about 85pc — 21,318m RMB ($2.954bn) will be financed by suppliers’ credit.

Considering the recommendations/proposals given by Fertiliser Review Committee, the committee decided that the SNGPL-based plants i.e. Fatima Fertiliser and Agritech may be allowed to operate beyond Aug 31 till Oct 15.

Published in Dawn, August 9th, 2023