The Asian Development Bank (ADB) has approved $400 million loan to Pakistan for ''Private Participation in Infrastructure and Program-I (PPIP)'' aimed at enhancing economic growth through improved infrastructure services.
Its outcome will enhance private sector participation in the country''s infrastructure investment and maintenance to reduce the government''s fiscal burden and provide better infrastructure services to the population and enterprises, official sources told Business Recorder.
To achieve the desired objectives, subprograms will also be executed, including strengthening the enabling environment for PPI by addressing the remaining policy, legal, regulatory, and institutional constraints and providing technical and financial support for PPI projects.
This is a cluster program that will consist of Subprogram-I and Subprogram-II (the design of which will depend on the outcome of Subprogram-I and the government''s emerging priorities).
A technical assistant grant will support implementation of Subprogram- I and capacity-building initiatives required to support the government''s PPI initiatives over the medium- and long-term.
By promoting PPI, the operation will help the government to leverage more financial resources into infrastructure by using the private sector as an intermediary. This will help to fill the gap between (i) the infrastructure the government can afford, and (ii) the infrastructure needed for economic development and poverty reduction, as articulated under the government''s Medium Term Development Framework (MTDF).
Infrastructure development is a key pillar of the government''s MTDF in recognition of its importance for sustaining economic growth and alleviating poverty. The MTDF acknowledges the necessity of PPI in infrastructure and utilities from the point of view of capital mobilisation, but also in terms of ensuring efficiency and effectiveness.
The government is committed to promote PPI by addressing remaining political, legal, regulatory, and institutional constraints to PPI in priority sectors. Further, under the MTDF, the government has approved specific development programs for the power, transport, and water sectors.
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