close
Thursday February 02, 2023

ADB disbursed $28bn loans to Pakistan since 1966

Out of the total committed 723 public sector loans, grants and technical assistance of $37 billion, the ADB disbursed cumulative loans and grants of $28 billion for Pakistan since its inception

September 15, 2022
ADB disbursed $28bn loans to Pakistan since 1966. File photo
ADB disbursed $28bn loans to Pakistan since 1966. File photo

ISLAMABAD: Out of the total committed 723 public sector loans, grants and technical assistance of $37 billion, the Asian Development Bank (ADB) has disbursed cumulative loans and grants of $28 billion for Pakistan since its inception.

The ADB committed very meagre resources for education as its share stood at 1.2 per cent, health at 3.35 per cent and Information and Communication Technology at zero per cent. A major chunk of resources was committed to the energy sector as 21.11 per cent of the resources were provided but it remained one of the highly inefficient sectors of Pakistan.

The ADB committed more resources to Trade and Supply Chain and Public Sector Management. The report also highlights that ADB evaluated 32 projects of sovereign projects and programmes in Pakistan during the last 10 years and found that 17 programmes were highly successful, 10 less successful and five unsuccessful. Out of 10 non-sovereign programmes/projects, seven were highly successful and three were failure.

According to a fact sheet released by ADB on Pakistan, it says Pakistan was a founding member of the Asian Development Bank (ADB) in 1966. Since then, ADB has helped the country reduce poverty and improve the country’s prosperity and resilience by supporting infrastructure, urban services, the private sector, energy and food security, transport networks, and social services. Aligned with the government’s development vision, ADB’s country partnership strategy 2021–2025 for Pakistan focuses on three priorities—improving economic management, building resilience, and boosting competitiveness and private sector development.

To date, ADB has committed 723 public sector loans, grants, and technical assistance totalling $37 billion to Pakistan. Cumulative loan and grant disbursements to Pakistan amount to $28.27 billion. These were financed by regular and concessional ordinary capital resources, the Asian Development Fund, and other special funds. ADB’s ongoing sovereign portfolio in Pakistan includes 48 loans and 3 grants worth $8.42 billion. In 2021, ADB’s loan and grant disbursements to Pakistan amounted to $1.31 billion, comprising $0.3 billion in programme lending and $1.01 billion from project lending and $3 million from grants. ADB’s support to Pakistan’s coronavirus disease (COVID-19) pandemic response in 2021 included a $500 million loan in August to help procure and deploy a safe and effective vaccine, and a $603 million loan—of which $3 million is from the ADF—for an integrated social protection program to strengthen Pakistan’s flagship Ehsaas programme. The loan is complemented by a $24 million grant from the Education Above All Foundation. The programme builds on an earlier $500 million loan under ADB’s COVID-19 Active Response and Expenditure Support Programme and a $300 million emergency assistance loan to strengthen Pakistan’s public health response to shield the poorest families from the pandemic.

ADB committed $300 million for the construction of the Balakot hydropower plant on the Kunhar river near Balakot City in Khyber Pakhtunkhwa. By 2027, the plant will add 1,143-GW hours of clean energy annually to the country’s energy mix, enhancing the energy sector’s reliability and sustainability. Another $300 million policy-based loan was committed to supporting reforms to strengthen Pakistan’s energy sector and improve its financial sustainability. The programme will help reduce and manage the accumulated cash shortfall across the power supply chain known as circular debt. ADB continued to strengthen Pakistan’s finance sector, develop competitive capital markets, and encourage private sector investment. ADB committed a $235 million loan to further upgrade the 222-km Shikarpur–Rajanpur section of the National Highway 55 from two lanes into a four-lane carriageway, linking the ports of Karachi and Gwadar in southern Pakistan with national and international economic centres to the north.

Under the country partnership strategy 2021–2025, ADB will support Pakistan’s development priorities by focusing on improving economic management, building resilience, and boosting competitiveness and private sector development. ADB’s assistance for domestic resource mobilization, financial inclusion, and energy sector reforms will support macroeconomic management. Financing for workforce readiness and health will help build resilience. Support for infrastructure and urban sector investments will improve rural connectivity and urban municipal services. Improving access to finance and supporting public-private partnerships will boost competitiveness and private sector development to return the economy to a sustainable growth trajectory. The ADB will also help the country prepare for digital transformation through policy improvements, public institution strengthening, and relevant infrastructure investments, the report concluded.

Comments