ADB, Pakistan sign $200mln loan accord for disaster management

ISLAMABAD: The Asian Development Bank (ADB) on Friday agreed to loan $200 million to help Pakistan manage disaster risks.

Australia also pledged a grant worth 4.5 million Australian dollars for the national disaster risk management fund. Both ADB and Australian government signed the loan and grant agreements on Friday. Minister for Finance, Revenue, Economic Affairs Statistics and Privatization Ishaq Dar witnessed the signing ceremony.

The National Disaster Risk Management Fund is being established as a public limited company under Section 42 of the Companies Ordinance 2016 for sustainable mechanism and permanent instrument to enhance Pakistan’s resilience to any disaster.

The focus of the Fund is on disaster risk reduction, design development and seeding of disaster risk financing strategies and instruments and partnerships with other organisations to provide relief and recovery support, including livelihood restoration initiatives and reconstruction and rehabilitation of key public infrastructure.  The eventual total outlay of the fund would be three billion dollars. ADB will provide a total of one billion dollars in five tranches. Of total commitment, a $200 million worth of loan agreement has been signed.

The Australian government is also providing co-financing grant for this fund. Norway, Belgium and Switzerland have also shown their interest to contribute to the fund.  Minister Dar thanked ADB and Australia for providing support and enabling Pakistan to establish a common window to pool financial resources.

“This mechanism will support government’s financing for disaster management efforts,” he said. “The participation of our development partners in this noble cause will also inspire organisations around the world to take similar initiatives.”

Dar said the initiative will strengthen Pakistan’s disaster preparedness efforts. Werner Liepach, country director of ADB said the initiative will mitigate the disaster effects as well as help cushion the fiscal shock of the catastrophe.