The Economic Co-ordination Committee (ECC) of the Cabinet considered and approved the "Infrastructure Finance Policy Pakistan 2017" to attract investment from private sector in infrastructure projects as available public funds are not sufficient to finance them. Sources said that Finance Division put up the policy before the ECC meeting presided over by Finance Minister Ishaq Dar and stated that under the policy, a sound and long-term infrastructure finance framework has been provided that caters to both demand and supply sides of finance and is designed to attract Foreign Direct Investment (FDI) and mobilise private financing for public infrastructure.
Pakistan's economy has been on the rise in the wake of sustained economic reforms agenda implemented since 2013. After having achieved macroeconomic stability in the first three years, the government is now focused on attaining higher sustainable and inclusive growth. The GDP growth last year was 4.7% which was the highest in the last eight years.
To carry the growth momentum further and meet country's infrastructure needs, the government supports the expansion of infrastructure both directly through pubic sector investment and indirectly by facilitating private sector investment and finance.
Available public finances are not sufficient for funding such infrastructure projects which need to be augmented by mobilising finances and attracting investment from the private sector. In this regard, development of a sound long-term infrastructure finance policy that caters to both the demand and supply sides and is designed to attract foreign direct investment and mobilise private financing for public Infrastructure, is a critical piece of the overall strategy and will be crucial to sustain the current investment levels.
Accordingly, a policy framework for financing of infrastructure projects has been developed in consultation with the key stakeholders. The policy seeks diversification of financing sources and strengthening of key institutions for mobilising private investment in infrastructure sector. While proposing an action plan, the policy aims to address the country's long-term infrastructure and financing requirements through the efficient policy framework for infrastructure finance, good practices framework for infrastructure projects, enhanced financial intermediation to support infrastructure investment and strengthening the development finance framework.
Draft policy was circulated for views/comments to the Ministry of Planning, Development & Reform, Ministry of Communication, Ministry of Water & Power, Ministry of Petroleum & Natural Resources, Ministry of Railways, Aviation Division, State Bank of Pakistan (SBP), and Securities and Exchange Commission of Pakistan. Subsequently a stakeholder consultation meeting on the policy was also held in the Ministry of Finance. These comments have been accommodated in the policy document wherever deemed appropriate. Valuable input was also provided by the Planning Commission of Pakistan.
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