KARACHI: Asian Development Bank (ADB) has co-financed more than $16 billion to fund trade development in Pakistan as of November last year, a document revealed on Friday.
ADB’s trade finance program (TFP) fills market gaps by providing guarantees and loans through partner banks in support of trade.
In Pakistan, the TFP works with 13 banks and has supported $16.03 billion in trade and 5,159 transactions as of November 2019 - 52.9 percent of the $16.03 billion was co-financed by the private sector, the document said.
Likewise, the supply chain finance program supported $0.88 million in trade over five transactions as of November in Pakistan and mobilised $0.44 million in co-financing.
ADB Vice President for Finance and Risk Management Ingrid Van Wees late last year said a vibrant public-private partnership (PPP) and innovative financing needs of the SME sector is very significant. “We are currently supporting three PPP initiatives in Punjab and Sindh provinces in partnership with the DFID (Department for International Development),” Wees said. “Private sector participation is vital to bridge the infrastructure investment gaps.”
Overall, the Manila-based lender disbursed $2.4 billion worth of loans and grants to Pakistan during the last year up to December-end, lending support the country to reduce current account deficit.
The amount included $1.8 billion in program lending and $634.3 million in project lending. The program-lending or policy-based loan provided one billion dollar in immediate budget support to shore up the country’s public finances and $500 million to improve trade competitiveness, the document said.
ADB also provided additional financing of $200 million to help support the Benazir Income Support Program — part of the government’s flagship Ehsas poverty alleviation strategy aimed at reducing inequality and investing in economically disadvantaged people.
ADB approved a $235 million loan to Sindh in 2019 to help develop a bus rapid transit system with innovative energy and climate resilience features in Karachi. ADB also approved a $75 million project to enhance secondary education in Sindh.
ADB approved project readiness financing totaling $17.3 million last for the cities improvement project in Khyber Pakhtunkwa and the water resources project in Punjab to help strengthen project readiness prior to approval.
In agriculture, ADB approved a major change in scope of Trimmu and Panjnad barrages adding Islam barrage by utilising surplus loan proceeds of $21 million, and initiated work on $275 million Jalalpur irrigation project.
The bank approved a grant of $5.1 million for enhancing Punjab technology-based agriculture and marketing, market development and preparing Kurram Tangi integrated water resources development project.
ADB has an ongoing portfolio of $2.2 billion in the energy sector, covering energy generation, transmission, distribution, energy efficiency, renewable energy development, and analytical tools and advisory assistance.
ADB committed a $300 million policy-based loan last year to help Pakistan to address financial sustainability, governance, and energy infrastructure policy constraints.
ADB’s ongoing portfolio in the transport sector totals $2.5 billion and spans urban corridors, border crossing points, Greenfield motorways and expressways, and existing national and provincial highways.
In 2019, ADB committed a $75 million loan to widen and upgrade 42 kilometers of the busy Mardan–Swabi road in the Khyber Pakhtunkhwa. Besides, ADB completed the flood emergency reconstruction and resilience project, under which 1,740 km of provincial highways and districts roads were rehabilitated and repaired in flood affected districts of Punjab. Another 204 km of major roads were rehabilitated, and 75 km of district roads were repaired in the three districts.
The project also rehabilitated 90 percent of the flood protection infrastructure. Two new flood protection bunds are built along both banks of the river Jhelum with a cumulative length of about 7,300 meters. The project also developed the safety inspection manuals for dams and flood protection infrastructure.
ADB is also actively supporting public-private partnership initiatives of the provinces and the federal government to support the delivery of public infrastructure with private sector participation, along with development of effective fiscal risk management functions.
This initiative enables them to earn a dignified livelihood for their families
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