WB rejects 'unfounded' reports of delay in loan for Pakistan

Country director says projects shared with board after 'due process' and 'based on the proposed projects’ readiness'

World Bank Country Director for Pakistan Najy Benhassine on Thursday rejected reports of a delay in loan approval for Pakistan.

Taking to Twitter, Benhassine said that press reports about a World Bank decision to delay approval of potential Bank operations in Pakistan are "unfounded".

He added that the tentative board approval dates of all proposed operations and their funding are clear.

The press reports that refer to a World Bank decision to delay approval of potential Bank operations in Pakistan are unfounded. The tentative Board approval dates of all of our proposed operations, as well as their amounts, are indicative, and…(1/2)

— Najy Benhassine (@WBPakistanCD) January 19, 2023

He further maintained that the WB decides the timing for sharing project proposals with the Board for consideration after "due process" and "based on the proposed projects’ readiness".

(2/2) …the World Bank decides on the timing for sharing project proposals for Board consideration following due process and based on the proposed projects’ readiness.

— Najy Benhassine (@WBPakistanCD) January 19, 2023

Earlier this week, the media reported that the World Bank has delayed the approval of two loans, worth $1.1 billion, until the next fiscal year, adding that it also opposed slapping a flood levy on imports, creating a new hole in an already ambitious $32 billion annual financing plan.

Read WB diverts $615m for flood-relief work

This decision to withhold approval of the second Resilient Institutions for Sustainable Economy (RISE-II) loan worth $450 million and the second Programme for Affordable Energy (PACE-II) worth $600 million would have been a major jolt for the government.

The government had hoped to receive an approval for at least the $450 million loan in January, which would have unlocked another $450 million from the Asian Infrastructure Investment Bank – which had pegged a $450 million loan with the approval of the World Bank’s RISE-II.

The coalition government is already struggling to revive the International Monetary Fund (IMF) programme. Thus, this decision by the World Bank would have created a hole of $1.5 billion against the government’s annual financing plan.