K-P owes Rs265b in foreign loans

The Khyber-Pakhtunkhwa government has been engaged in heavy borrowing from the World Bank, Asian Development Bank and other international organization and today its total foreign debt stands at Rs265 billion which is increasing each passing year.

The documents obtained by The Express Tribune shows that the government started with taking small loans of Rs4 billion back in the year 2014 and last year agreements were signed for Rs164 billion loans.

So thanks to the sitting and previous PTI government the province is now indebted to the World Bank, Asian Development Bank and other financial institutions to the tune of Rs265 billion.

K-P province took cumulative loan of Rs164 billion from the international institutions in the financial year of 2019-2020. A loan of Rs144 billion will be secured from the World Bank and out of this Rs72 billion have been sought for the energy sector. For the Rs72 billion the provincial government has signed an agreement.

The provincial government took a loan of Rs49.60 billion from the Asian Development Bank for Peshawar BRT project.

The repayment of Rs265 billion loans with interest will be much more challenging task for a province like K-P with scant resources. And this will be a huge burden on the exchequer during the coming fiscal years.

According to the documents to be presented by the finance department in the provincial assembly on Monday, more than Rs11 billion were borrowed for a tourism project in 2019-2020, over Rs28 billion for agriculture projects, more than Rs18 billion for the Public Resource Management Programme of the Finance Department, Rs12 billion for the Khyber-Pakhtunkhwa Economic Corridor, Rs72 billion for the energy project, Rs12 billion for the Mardan-Swabi Highway, Rs800 million for coronavirus emergency and loans of Rs1.12 billion for the development of cities of Khyber-Pakhtunkhwa.

During fiscal year 2018-19 a foreign loan of Rs52 billion was acquired for agriculture, energy and power, finance, construction of highways, sports and tourism, transport and urban development. Agreements were signed for loans worth Rs9.12 billion in the year 2016-17 for the same projects.

According to the documents during 2015-16 Rs5.223 billion were borrowed from Asian Development Bank and Japan International Cooperation Agency for highway construction, mass transit and energy projects. Similarly, a loan of Rs9 billion has been taken from JICA in the year 2014-15. During the year 2013-14, a loan of Rs4.849 billion was obtained.

Published in The Express Tribune, January 24^th, 2021.