The executive board of the ADB approved these loans in Manila followed by a signing ceremony between the Bank and the government in Islamabad.
The parties got the agreement done before June 30, the last day of the current fiscal, to get the money for budget financing.
The agreements were signed by the representatives of Punjab, Sindh and the ADB. The centre provided guarantees on behalf of the provincial governments.
Both the loans are second tranche of the programmes initiated during the last fiscal year in Punjab and Sindh. The Manila-based donor agency has given a second tranche of $120 million for the Sindh Growth and Rural Revitalisation Programme and $150 million for the Punjab Millennium Development Goals (MDGs) Programme.
“The Sindh programme is targeted to minimise the disparity between the urban and rural population by stimulating economic activities through the private sector,” said ADB Country Director Rune Stroem.
He said the second phase of the programme would support a broad range of government reforms to spur growth including the development of a regulatory framework for public-private partnerships and corporatisation of agriculture and produce markets. It would also help the government improve the management of public finances.
The government would return the loan in 24 years and pay an interest rate ranging from one per cent to 1.5 per cent.
Rune Stroem said that the $150 million loan would help the Punjab government to provide better health facilities. He said the ADB would monitor the provision of health services in Punjab, particularly the supply of drugs.
Secretary Health Punjab Fawad Hasan Fawad said that despite the ADB-financed programme the Punjab government will not be able to provide 100 per cent health coverage to its citizens even after the completion of the programme.
However, he added, the programme would help reduce maternal and infant mortality, an area where Punjab lags behind according to the target.
Fawad said that the loan will be utilised in 13 southern and western districts of Punjab on the basis of population, backwardness and performance. The districts include Bhakkar, Laya, Rahim Yar Khan, Bahawalnagar, DG Khan, Toba Tek Singh, Lahore and Chakwal.
He said that the Punjab government could not achieve all the targets set for the first year of the implementation due to lack of human resources.
The ADB official said that key social indicators in Punjab lag well behind those of neighbouring countries. Without major improvements in healthcare delivery, the province will unlikely meet the MDGs for reduced child and maternal mortality by 2015, said the official.
Secretary of Economic Affairs Division, Sibtain Fazal Haleem said that the ADB extended $451 million loans during this year and another $670 million will come before June 30.
Published in The Express Tribune, June 25th, 2010.
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