The Asian Development Bank (ADB) is providing a 205 million dollars loan and grant package to help increase access to quality social services in Balochistan. The programme will support policy reforms to address longstanding issues in education, health, and water supply and sanitation.
It will also help the provincial local governments to fulfil their devolved roles and responsibilities in social service delivery.
The programme aims to improve access to and quality of social services, and will empower citizens and enable the private sector to play a greater role in social service delivery.
Balochistan, Pakistan's largest province in terms of area/land, has the most challenging human development indicators among the country's four provinces.
The government recently embarked on a major decentralisation effort, which includes the devolution of social service management to local governments.
This presents an opportunity to improve social service delivery by improving Balochistan's capacity to increase its expenditures in this sector.
"Human capital must rapidly improve for Balochistan to benefit from the buoyant economic growth witnessed in the past few years in Pakistan," says Sekhar Bonu, an ADB health specialist. "Balochistan needs to bring in governance reforms and strengthen institutions in the social sector to improve the effectiveness of public and private social service delivery."
A 130 million dollars loan from ADB's ordinary capital resources (OCR) will finance policy reforms to improve the funding, management, and quality of social services, the managerial power of local governments and the involvement of citizens and the private sector in social service delivery.
A 65 million dollars loan from ADB's concessional Asian Development Fund (ADF) will help increase funding for social services by providing performance grants to eligible district and municipal governments.
These grants target priority investments and are designed to enable local governments to identify service gaps and flexibly respond to local needs.
An additional 5 million dollars technical assistance (TA) loan from the ADF will support the programme's implementation, as well as help develop governance in the social services and strengthen sector management.
Another 5 million dollars grant from the ADF will specifically help address the provincial's public health challenges, such as the high morbidity and mortality from malaria and tuberculosis, preventing the spread of HIV/AIDS, and reducing vaccine-preventable diseases among children.
The programme is ADB's first for the social sectors in Balochistan, and follows loans that strengthened the province's local governments and resource management.
The OCR loan carries a 15-year term, including a grace period of 3 years, and an interest rate determined in accordance with ADB's Libor-based lending facility.
The 65 million dollars ADF loan carries a 24-year term, while the 5 million dollars TA loan from the ADF carries a 32-year term.
Both include a grace period of 8 years and carry interest rate charges of 1 percent per annum during the grace period and 1.5 percent thereafter.
The government of Balochistan will contribute 1.25 million dollars equivalent toward the total cost of the TA project.
The Balochistan Planning and Development Department is the executing agency for the programme, which will be carried out up to about June 2009, and the TA project, due for completion in December 2010.-PR
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