ADB hints at $6 billion in new loans during next three years
Lending agency will give around $2b per annum; final disbursement will depend on projects’ readiness
A worker walks past inside the Asian Development Bank (ADB) headquarters in Manila. PHOTO: REUTERS
ISLAMABAD:
Amid Pakistan’s growing financing needs, the Vice President of Asian Development Bank (ADB) on Thursday hinted at giving $6 billion in new loans to Islamabad in the next three years and showed its willingness to expand its policy-based lending.
The ADB would give roughly $2 billion per annum to Pakistan during the next three years but the final disbursement would depend upon the projects’ readiness, said ADB Vice President Wencai Zhang, while speaking to media persons here in Islamabad.
Wencai is visiting Pakistan to assess the country’s financing needs for the period of 2018 to 2021. He said that the cost overruns and delays in projects processing and executions were somehow affecting the final disbursements. He said that Islamabad wants $2.5 billion per annum lending by the ADB but all would depend upon projects readiness.
Wencai said that during fiscal year 2016-17 that ended on June 30, the Manila-based lending agency gave over $1.8 billion and the figure could have touched $2 billion but two projects could not be timely processed.
ADB green-lights $300m loan for PR reforms
Due to a low revenue base and high project financing requirements, Pakistan meets a significant part of its financial requirements by borrowing from foreign lenders.
The vice president said that Pakistan’s short-term economic vulnerabilities have reduced and the country’s economic outlook was positive. He, however, maintained that the country needs to build on its gains by ensuring implementation of deep-rooted structural reforms.
He said that political and economic stability was a must for continuation of reforms. To a question, Wencai said that it was up to Pakistan to decide whether it needs another bailout programme from the International Monetary Fund.
The vice president also showed keenness to give policy loans to Pakistan in new areas after ADB’s experiment with giving loans for Public Sector Enterprises and Energy Reforms remained successful.
The ADB’s Senior Advisor for Central and West Asia Department, Werner Liepach, counted publication of financial accounts by the PSEs and enforcement of PSEs Governance rules as success stories. However, his argument was not convincing. Despite giving $1.1 billion for energy reforms in the past two years, the sector could not become financially viable.
Wencai also called on Finance Minister Ishaq Dar. He was accompanied by ADB Country Director for Pakistan Xiaohong Yang.
The vice president said that development cooperation has expanded between Pakistan and ADB during the last few years, which has resulted in impressive levels of approvals and disbursement of aid from ADB to Pakistan in fiscal year 2016-17.
He said that ADB is interested in learning more about the government’s new initiatives, including the Pakistan Development Fund (PDF) and the Pakistan Infrastructure Bank (PIB), with a view to potentially collaborate on them with the government. The vice president said that the ADB’s recent experience of policy-based lending for reforms in Pakistan has been very successful.
ADB to provide Pakistan $1.055b for nine projects
Both sides agreed to identify further areas where reforms are required, which may be good candidates for policy-based lending. The areas that are being explored in this regard include governance and public sector enterprise reforms. He reiterated ADB’s commitment to supporting development initiatives in Pakistan.
The finance minister appreciated the role of ADB as a development partner for Pakistan.
The finance minister said that, after having achieved macroeconomic stability, the government is now focused on achieving higher, sustainable and inclusive economic growth. He said that both ADB and the government of Pakistan must work together to further strengthen this relationship.
Published in The Express Tribune, July 7th, 2017.
Amid Pakistan’s growing financing needs, the Vice President of Asian Development Bank (ADB) on Thursday hinted at giving $6 billion in new loans to Islamabad in the next three years and showed its willingness to expand its policy-based lending.
The ADB would give roughly $2 billion per annum to Pakistan during the next three years but the final disbursement would depend upon the projects’ readiness, said ADB Vice President Wencai Zhang, while speaking to media persons here in Islamabad.
Wencai is visiting Pakistan to assess the country’s financing needs for the period of 2018 to 2021. He said that the cost overruns and delays in projects processing and executions were somehow affecting the final disbursements. He said that Islamabad wants $2.5 billion per annum lending by the ADB but all would depend upon projects readiness.
Wencai said that during fiscal year 2016-17 that ended on June 30, the Manila-based lending agency gave over $1.8 billion and the figure could have touched $2 billion but two projects could not be timely processed.
ADB green-lights $300m loan for PR reforms
Due to a low revenue base and high project financing requirements, Pakistan meets a significant part of its financial requirements by borrowing from foreign lenders.
The vice president said that Pakistan’s short-term economic vulnerabilities have reduced and the country’s economic outlook was positive. He, however, maintained that the country needs to build on its gains by ensuring implementation of deep-rooted structural reforms.
He said that political and economic stability was a must for continuation of reforms. To a question, Wencai said that it was up to Pakistan to decide whether it needs another bailout programme from the International Monetary Fund.
The vice president also showed keenness to give policy loans to Pakistan in new areas after ADB’s experiment with giving loans for Public Sector Enterprises and Energy Reforms remained successful.
The ADB’s Senior Advisor for Central and West Asia Department, Werner Liepach, counted publication of financial accounts by the PSEs and enforcement of PSEs Governance rules as success stories. However, his argument was not convincing. Despite giving $1.1 billion for energy reforms in the past two years, the sector could not become financially viable.
Wencai also called on Finance Minister Ishaq Dar. He was accompanied by ADB Country Director for Pakistan Xiaohong Yang.
The vice president said that development cooperation has expanded between Pakistan and ADB during the last few years, which has resulted in impressive levels of approvals and disbursement of aid from ADB to Pakistan in fiscal year 2016-17.
He said that ADB is interested in learning more about the government’s new initiatives, including the Pakistan Development Fund (PDF) and the Pakistan Infrastructure Bank (PIB), with a view to potentially collaborate on them with the government. The vice president said that the ADB’s recent experience of policy-based lending for reforms in Pakistan has been very successful.
ADB to provide Pakistan $1.055b for nine projects
Both sides agreed to identify further areas where reforms are required, which may be good candidates for policy-based lending. The areas that are being explored in this regard include governance and public sector enterprise reforms. He reiterated ADB’s commitment to supporting development initiatives in Pakistan.
The finance minister appreciated the role of ADB as a development partner for Pakistan.
The finance minister said that, after having achieved macroeconomic stability, the government is now focused on achieving higher, sustainable and inclusive economic growth. He said that both ADB and the government of Pakistan must work together to further strengthen this relationship.
Published in The Express Tribune, July 7th, 2017.