Of $11bn pledged to Pakistan after floods, only $1.4bn disbursed so far

ISLAMABAD: Out of total pledges of $11 billion made by all multilateral and bilateral donors for flood-affected areas in Pakistan, the disbursement has so far remained dismally slow and stood at just $1.4 billion on account of project financing.

If the Oil Facility from the Islamic Development Bank (IsDB) and the Kingdom of Saudi Arabia/Saudi Fund for Development (SFD) is incorporated, then the total disbursement touched the level of $2.69 billion so far against pledges of $11 billion made by the donors in Paris in the aftermath of devastating floods in the last financial year. This flood had caused losses of over $16.4 billion.

The project financing disbursement for flood-affected areas in Pakistan has become crucial because Islamabad is making plans to contemplate options for requesting the IMF to augment its loan size on account of providing climate financing after which the size of a three-year programme of Extended Fund Facility (EFF) might go up from $6 billion to $8 billion.

Official data shows that the total project financing pledges stood at $6.384 billion out of which the actual disbursements stand at $1.393 billion so far. It is projected that another $654 million in disbursements will be materialized by the end of June 2024. The World Bank (WB) had committed a pledged amount of $2.199 billion and the disbursed loan amount for flood-affected areas stood at $969 million. It is projected that another loan amount of $119.3 million will be disbursed by the end of June 2024.

The Asian Development Bank made pledges of $1.561 billion for flood-affected areas in Pakistan but the actual disbursement till the end of December 2023 stood at only $108.79 million. It is expected that the disbursement of $340.9 million is projected to be materialized by the end of June 2024.

The Asian Infrastructure Investment Bank (AIIB) and China had made pledges of $1 billion and $100 million respectively out of which the so far disbursed amount stood at just $250 million. There is zero projected amount expected to be disbursed till the end of the ongoing financial year. The Islamic Development Bank (IsDB) had made pledges of $600 million out of which the disbursed loan amount for project financing was standing at just $60.7 million. It is projected that this disbursement from IsDB will go up by $69.5 million by the end of June 2024.

The Paris Club countries had made pledges of $898 million out of which the disbursed amount in the shape of project loans stood at 104.58 million. It is projected that this loan amount will further be increased by $21.99 million by June 2024. The Non-Paris Club countries made pledges of $25 million but zero disbursements have been made so far and there was no expectation for any releases till the end of June 2024.

On account of Oil Financing, the Islamic Development Bank had pledged a loan amount of $3.6 billion out of which only $200 million were so far disbursed. There is no projection about the upcoming disbursement on this account till the end of June 2024. The KSA made pledges of $1 billion on account of the oil facility and disbursed the total amount of $1 billion till the end of December 2023.

The cash deposits in PM Flood Relief Fund secured pledges of $2.1 million and received the whole amount.

In totality, there were total pledges of $10.987 billion for flood-related loans, Pakistan has secured $2.697 billion in the shape of project financing loans and oil financing so far. Now it is projected that another $551.75 million is expected to be disbursed by the end of June 2024.

The official sources said that the donors made pledges and even the respective forums of CDWP and Ecnec granted approval of the projects but the execution was dismally slow, especially in those projects executed by the provinces. This has caused a slowdown in the disbursement of donor-funded projects, said the official.