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April 10, 2020

ADB repurposes $50m to help Pakistan fight COVID-19

Top Story

April 10, 2020

ISLAMABAD: The Asian Development Bank (ADB) has repurposed $50 million from the National Disaster Risk Management Fund (NDRMF) to support the government’s preventive and response efforts to fight the outbreak of the coronavirus disease (COVID-19) in the country.

The funds, which form part of the ADB’s series of support for Pakistan’s fight against COVID-19, will help procure medical equipmentand supplies to strengthen hospitals, diagnostic laboratories, isolation units, and other medical facilities in the country.

The funds include reallocation of $30 million of previously approved but unutilized resources from the ADB to the NDRMF. Following a request for emergency support from the Government of Pakistan, the ADB swiftly processed a change in scope in its NDRMF project, enabling the repurposing and immediate use of these resources in the fight against COVID-19.

In addition, the NDRMF has provided $20 million using capital gains from its endowment fund financed by the ADB to support the government’s COVID-19 response. These funds complement the financing approved on April 2 by the World Bank under its Pandemic Response Effectiveness Project.

“The outbreak of COVID-19 is a profound challenge for Pakistan and we are committed to providing flexible and timely support to help manage this crisis,” said ADB Country Director for Pakistan Xiaohong Yang.

“This funding will immediately support Pakistan’s efforts to fight the pandemic and strengthen health care services for the poorest and most vulnerable groups — including the elderly, women, and children.”

Aside from the $50 million, the ADB is mobilizing existing technical assistance —Capacity Building of Disaster Risk Management Institutions — to provide training for at least 5,000 doctors, nurses, and technical staff working on the front lines in intensive care facilities. The grant will also provide additional technical capacity to the government for planning and coordinating its COVID-19 response.

Last month, the ADB approved $2.5 million in immediate response grant funding to help Pakistan purchase emergency medical supplies, personal protective equipment, diagnostic and laboratory supplies, and other equipment.

This consisted of $2 million from ADB’s Asia Pacific Disaster Response Fund, and $500,000 for procurement of supplies through the Unicef.

The NDRMF was established in 2016 in partnership with the ADB to provide support for disaster risk reduction and to invest in early warning systems and disaster preparedness projects in Pakistan.

The bank provided initial financing through a $200 million loan while the Government of Australia contributed $3.4 million. In 2018, the Swiss Agency for Development provided a $1.5 million grant and technical assistance to support NDRMF.

In January 2020, an additional $5 million was committed to the fund by the Government of Norway. On 18 March, the ADB announced an initial package of approximately $6.5 billion to address the immediate needs of its developing member countries as they respond to the COVID-19 pandemic.

Meanwhile, Resident Representative of International Monetary Fund (IMF) in Pakistan Ms Maria Teresa Daban Sanchez on Thursday said that Pakistan would receive $1.4 billion through Rapid Financing Instrument (RFI) from the fund to support the country in current challenging situation of COVID-19.

Pakistan had demanded the package of $1.4 billion from IMF, both sides were continuing negotiation to support these efforts and ensure prompt and adequate relief to the people and the economy, the government of Pakistan, Maria Teresa Daban said.

She said this emergency financing would allow the government to address additional and urgent balance of payments needs and support policies that would make it possible to direct funds swiftly to Pakistan s most affected sectors, including social protection, daily wage earners, and the healthcare system.

"Our team is working expeditiously to respond to this request so that a proposal can be considered by the IMF s Executive Board as soon as possible" she added.

Replying to a question, she said that to support these efforts and ensure prompt and adequate relief to the people and the economy, the government of Pakistan had requested financial assistance under the Fund s Rapid Financing Instrument (RFI).

She said that Mozambique and Ecuador had already availed the facility for supporting their social safety programme.

The Fund stands ready to continue to support the authorities efforts to implement much-needed economic and structural reforms aimed at fostering strong and sustainable growth, Maria Teresa added.

Replying to a question, she said that the IMF had also postponed the second review of its $6 billion bailout package for Pakistan scheduled in previous week.