Global lending agencies to provide $1.5bn to Pakistan to mitigate COVID-19 impact
The World Bank (WB), Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB) will provide financing worth $1.5 billion to Pakistan to strengthen its health system and mitigate the impact of the COVID-19 pandemic.
“There are no conditions attached by the AIIB for providing this budgetary support of $500 million at this difficult time,” a top official source told The News on Friday. All three lenders had approved their loan facility separately in past weeks and they signed the same with the Government of Pakistan here Friday.”
The AIIB joined hands with ADB as co-financer to provide $500 million each, so the total lending amount provided by them touched the $1 billion mark.
Noor Ahmed, Secretary Ministry of Economic Affairs, signed the three loan agreements on behalf of the Government of Pakistan, while Patchamuthu Illangovan, Country Director WB; Ms Xiaohong Yang, Country Director, ADB; and Konstantin Limitovsriy, Vice President, AIIB, signed the agreements on behalf of the World Bank, Asian Development Bank and AIIB respectively. The disbursement of $1,500 million will be made to Pakistan in the next few days.
According to an official announcement by the Economic Affairs Division (EAD), Prime Minister Imran Khan witnessed the signing ceremony of the financing agreements.
This is concessional financing in the form of budgetary support that is being provided by the three IFIs that will help mitigate the socio-economic impact of COVID-19 pandemic and strengthen health, education, and social safety nets systems.
The three programmes’ details are:
The Asian Infrastructure Investment Bank is extending co-financing of $500 million for CARES to augment the government’s efforts to mitigate the direct and indirect impacts of COVID-19 pandemic.
COVID-19 Active Response and Expenditure Support Programme (CARES) $500 million: The Asian Development Bank is extending financial support of $500 million for this programme to support the government of Pakistan’s efforts to strengthen the health system and mitigate the socio-economic impact of the COVID-19 pandemic.
The scope of the CARES programme covers: (i) social protection for the poor and vulnerable, (ii) an expanded health sector response to the pandemic; and (iii) a pro-poor fiscal stimulus package to ensure recovery in growth and employment.
Securing Human Investments to Foster Transformation (SHIFT) $500 million: It aims to strengthen the civil registration and vital statistics, health and education systems essential for human capital accumulation; recognise and support the contribution of women to economic productivity; and improve the efficiency of the national safety nets.
The country directors of WB and ADB reiterated their commitment to support Pakistan and appreciated the government’s resolve, efforts and measure to fight the pandemic.
Minister for Economic Affairs Khusro Bakhtiar, while thanking the three IFIs for their continued support, especially in times of crisis, said that this reflects the confidence of the IFIs and the international development community in government’s policies and endeavours for pursuing structural reforms process.