ADB’s ongoing sovereign portfolio in Pakistan includes 48 loans worth $8.42bn

ISLAMABAD: The ongoing sovereign portfolio of the Asian Development Bank (ADB) in Pakistan includes 48 loans and three grants worth of $8.42 billion.

According to the member fact sheet released by the ADB, in 2021, ADB’s loan and grant disbursements to Pakistan amounted to $1.31 billion, comprising $0.3 billion in program lending and $1.01 billion from project lending and $3 million from grants.

The report said the ADB’s country partnership strategy 2021–2025 for Pakistan focuses on three priorities–improving economic management, building resilience, and boosting competitiveness and private sector development, a private television channel Saturday quoted ADB report as having said.

To date, ADB has committed 723 public sector loans, grants, and technical assistance totaling $37 billion to Pakistan. Cumulative loan and grant disbursements to Pakistan amount to $28.27 billion. These were financed by regular and concessional ordinary capital resources, the Asian Development Fund, and other special funds.

ADB’s support to Pakistan’s coronavirus disease (COVID-19) pandemic response in 2021 included a $500 million loan in August to help procure and deploy safe and effective vaccine, and a $603 million loan—of which $3 million is from the ADF—for an integrated social protection program to strengthen Pakistan’s flagship Ehsaas program. The loan is complemented by a $24 million grant from the Education Above All Foundation.

ADB report advocates fiscal consolidation, policy reforms

The program builds on an earlier $500 million loan under ADB’s COVID-19 Active Response and Expenditure Support Program and a $300 million emergency assistance loan to strengthen Pakistan’s public health response to shield the poorest families from the pandemic. ADB committed $300 million for the construction of the Balakot hydropower plant on the Kunhar river near Balakot City in Khyber Pakhtunkhwa. By 2027, the plant will add 1,143-gigawatt hours of clean energy annually to the country’s energy mix, enhancing the energy sector’s reliability and sustainability, the report added.

Another $300 million policy-based loan was committed to supporting reforms to strengthen Pakistan’s energy sector and improve its financial sustainability. The program will help reduce and manage the accumulated cash shortfall across the power supply chain known as circular debt. ADB continued to strengthen Pakistan’s finance sector, develop competitive capital markets, and encourage private sector investment.

ADB committed a $235 million loan to further upgrade the 222-kilometer Shikarpur–Rajanpur section of the National Highway 55 from two lanes into a four-lane carriageway, linking the ports of Karachi and Gwadar in southern Pakistan with national and international economic centers to the north.

ADB committed $385 million loan to improve the livability and community health in the Khyber Pakhtunkhwa cities including Abbottabad, Kohat, Mardan, Mingora, and Peshawar, benefiting over 3.5 million people.

The report added that the total outstanding balances and undisbursed commitments of ADB’s nonsovereign transactions in Pakistan as of 31 December 2021 was $441.31 million representing 3.14% of ADB’s total private sector portfolio.

Under the country partnership strategy 2021–2025, ADB will support Pakistan’s development priorities by focusing on improving economic management, building resilience, and boosting competitiveness and private sector development.

ADB’s assistance for domestic resource mobilization, financial inclusion, and energy sector reforms will support macroeconomic management. Financing for workforce readiness and health will help build resilience. Support for infrastructure and urban sector investments will improve rural connectivity and urban municipal services.

Improving access to finance and supporting public-private partnerships will boost competitiveness and private sector development to return the economy to a sustainable growth trajectory. ADB will also help the country prepare for digital transformation through policy improvements, public institution strengthening, and relevant infrastructure investments.