World Bank announces $2 billion loan

0

ISLAMABAD:

The World Bank hinted on Saturday that it would provide Pakistan with a loan of $2 billion for the rehabilitation of people and the repair/reconstruction of infrastructure affected by the devastating floods – an amount which Pakistani authorities say does not constitute additional support to Islamabad.

The Washington-based lender made these intentions public after the visit of its vice president for the South Asia region, Martin Raiser, who concluded his first official visit to Pakistan. He reaffirmed the Bank’s commitment to support the people of Pakistan following the catastrophic floods, according to a statement issued by the local office of the World Bank.

The World Bank said that in immediate response, it is reallocating funds from existing World Bank-funded projects to meet urgent health, food, shelter, rehabilitation and cash transfer needs.

“In addition to this, we are working with federal and provincial authorities to prepare for emergency operations to rapidly begin reconstruction and rehabilitation to rebuild or repair infrastructure, housing and restore livelihoods, and to help strengthen Pakistan’s resilience to climate-related hazards,” he added. added “We are looking at approximately $2 billion in funding for this,” Raiser said.

Pakistan has already budgeted $2.6 billion in World Bank financing, including $1.4 billion from international development assistance – quota 20 – for the current fiscal year. An official from the Pakistani team, who was part of talks with the World Bank, said the lender had not yet committed substantial new financing.

The World Bank has indicated that it is reallocating loans that were about to be canceled or that it wants to reprioritize the existing IDA-20 portfolio, the official said. He added that this should not be seen as additional aid from the World Bank.

Pakistan wants the World Bank to take its three-year quota from IDA and include it in flood-related spending. He was also keen to have the contingent emergency response component of the World Bank loan activated for flood-related expenses by the lender.

Of the planned annual funding of $2.6 billion, the World Bank disbursed only $118 million in the July-August period this fiscal year, according to the Ministry of Economic Affairs.

The World Bank Vice President also expressed his solidarity with Pakistan for the loss of life suffered. “We are deeply saddened by the loss of lives and livelihoods due to the devastating floods and we are working with the federal and provincial governments to provide immediate relief to those most affected,” Raiser said.

During his two-day visit, Raiser met with Federal Cabinet Ministers, Governor of the State Bank of Pakistan Jameel Ahmed, Chairman of the National Disaster Management Authority, Lt. Gen. Akhtar Nawaz, as well as representatives of think tanks and the private sector. During these meetings, Raiser discussed in detail the impact of the floods in Pakistan and the support of the World Bank.

He pointed out that Pakistan was among the ten countries in the world most affected by climate change. He also encouraged the government to continue to focus on the successful implementation of ongoing investments in areas such as learning for girls and boys, health, stunting reduction, social protection, energy transition and climate resilience to lay the foundations for a sustainable recovery from this year’s floods. disaster.

Additionally, Raiser met with Sindh’s Chief Minister, Murad Ali Shah, and discussed the impact of massive rains and recent floods, and how the World Bank is supporting the government of Sindh in its reconstruction efforts. and rehabilitation. During his visit to Sindh, Raiser had the opportunity to see firsthand the extent of the damage and meet with affected households at a relief camp in Daddu district.

World Bank Country Director for Pakistan Najy Benhassine and International Finance Corporation Country Director Zeeshan Ahmed Sheikh were also present at the meeting. The sources said that Pakistan has also addressed the issue of decoupling two-policy loans amounting to $1.05 billion which the World Bank wants to approve together.

In addition, the Washington-based lender wants to combine the approval of a second $450 million budget support loan to Resilient Institutions for a Sustainable Economy (RISE-II) and a second affordable energy program of $600 million (PACE-II).

It has been learned that Pakistan has requested that at this stage the approval of a RISE-II policy loan of $450 million is also considered during the month of October, the government is ready to draw up a roadmap road for the implementation of the conditions set for the PACE-II loan of 600 million dollars.

The conditions of the RISE-II loan relate to the budgetary and macroeconomic framework of the country, also involving the provinces. Approval of the RISE-II loan will also unlock a $450 million loan from the Asian Infrastructure Investment Bank (AIIB) without fulfilling another set of conditions.

Published in The Express Tribune, September 25e2022.

As Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join the conversation.

Share.

Comments are closed.