Pakistan signed a Framework Agreement with Islamic Development Bank here on Sunday, under which IDB will provide $251.6 million as emergency assistance relating to earthquake in the country. Minister of State for Economic Affairs Hina Rabbani Khar and IDB president Dr Ahmad Mohammad Ali signed the deal, details of which are as follows:
a) $1.6 million will be a non-refundable grant.
b) $50 million as loan for 26 years with 7-year grace period and concessional service fee of about 1.25 percent per annum, whereas normal service fee is 2.5 percent.
c) $100 million Lease Finance for 20 years, including 5-year grace period with concessional mark-up of 3.835 percent per annum while normal markup is 5.1 percent p.a.
d) $100 million for trade finance to be used for import of petroleum products with concessional rate of 1 year LIBOR with 18 months repayment. Normal markup is 1 year LIBOR+70 basis points for 12 months repayment.
Official sources told Business Recorder that through this framework agreement, Government of Pakistan and the IDB have agreed on the ways and means of utilisation of the grant, which shall be used to finance fast disbursing projects in the fields of relief to affected communities., reconstruction of essential and social infrastructures/utilities damaged and/or destroyed by the disaster and to provide victims with medicines, food supplies and blankets with special focus on mothers, pregnant women and children.
The sources said that $50 million loan and the amount of $100 million will be used for rehabilitation, reconstruction and construction of new social and other vital infrastructure facilities, damaged by the disaster as well as for provision of necessary equipment.
They said that the amount allocated for lease finance will be used for projects in the field of reconstruction of infrastructure facilities and provision of necessary equipment e.g. roads, public utilities, telecommunications, power generation, etc.