ADB expected to lend $10 billion in next five years

ISLAMABAD: Asian Development Bank (ADB) is expected to disburse a significant $10 billion in program and project financing to Pakistan in the next five years to promote inclusive and sustainable economic growth in the country, sources said on Friday.

The Manila-based lender and Pakistani authorities have already finalised program and project lending portfolio worth $7 billion under the country operation business plan for the three years from 2020 to 2022.

“ADB is likely to lend $3 to $4 billion in the last two years under five years CPS (country partnership strategy) for which discussions are underway to identify potential areas,” a well-placed source told The News.

ADB and Pakistan are preparing a new five-year CPS for 2020 to 2024 in the aftermath of an International Monetary Fund’s loan program that the country signed last month. The new CPS would define development priorities to support economic transformation programs and is aligned with the government’s development vision and ADB’s 2030 strategy. The new strategy would also complement efforts by other development partners. ADB Vice President Shixin Chen said the bank is committed to support the government’s reform agenda to promote inclusive and sustainable economic growth, develop key infrastructure, strengthen regional cooperation, attract investments, and promote industry and the private sector.

“Over the last five decades, Pakistan and ADB have worked together to develop the country’s key infrastructure, promote exports and private sector efficiency, reform public sector management, develop the country’s financial market, improve urban services, provide emergency assistance, and prioritise social sector development,” Chen said in a statement on Friday following the bank’s delegation two-day visit to the country.

Chen met with the Prime Minister Imran Khan and officials during which he reaffirmed ADB’s support for the country’s development priorities. ADB would provide about $7 billion in fresh assistance for various development projects and policy-based programs during the next three years under its country operations business plan 2020–2022, aimed at developing the country’s social protection, urban services, energy security, transport, agriculture and water resources, education, trade, and tourism. “This will help spur inclusive and sustainable economic growth,” Chen said. Official documents showed that the three year program covers $2.3 billion for 2020, $2.08 billion for 2021 and $2.590 billion for 2022.

In the first year, the pipeline of program lending was proposed at $900 million, including $300 million for trade and competitiveness subprogram, $300 million for financial market development program and $300 million for energy sector resilience subprogram-2. ADB and Pakistan further finalised $350 million for construction of hydropower project in Balakot. It planned to provide additional $200 million for National Disaster Risk Management Fund and also provide $200 million as multi-tranche financing facility for Central Asia Regional Economic Cooperation (Carec) investment program. ADB planned to provide $150 million to improve health sector in Khyber Pakhtunkhwa. The projected loan is expected around $180 million for power transmission. ADB also decided to provide $100 million for Punjab’s Agriculture market development program next year. The documents showed that of total $2.08 billion proposed for 2021, ADB would provide $300 million for Kurum Tangi project, $100 million for climate policy sector development program and $150 million for Greater Thal Canal. The bank would also provide program lending of $300 million under energy sector resilience program and $300 million for financial sector development program. ADB planned to provide $150 million to support housing financing initiative. The lender decided to assist the government for its Ehsas program as $300 million would be provided for integrated social sector development program during the year.

For 2022, the ADB would loan $2.590 billion, including $140 million for power distribution program and $200 million for power transmission program. It would lend $240 million for Carec investment program, including $150 million for railways connectivity in the region.