The Asian Development Bank President has recommended to reallocate the ADB loan savings in SDR equivalent to $12.5 million from the Second Science Education Sector Project to the quick-disbursing component of the Earthquake Emergency Assistance Project (EEAP) for emergency rehabilitation and reconstruction of earthquake-affected areas.
According to official sources, if the proposed reallocation is approved, the Financing Agreement for the Earthquake Emergency Assistance Project will be amended as appropriate to reflect the change. According to official sources, if the proposed reallocation is approved, the Financing Agreement for the Earthquake Emergency Assistance Project will be amended as appropriate to reflect the change.
Pakistan Government has requested Asian Development Bank (ADB) approval for the cancellation of surplus funds in the Second Science Education Sector Project1 at an amount of special drawing rights (SDR) equivalent to $12.5 million and their use as quick-disbursing support for the reconstruction of affected areas after the South Asia earthquake of October 2005.
The cancellation of loan savings under the Second Science Education Sector Project has been approved based on the memo of the Pakistan Resident Mission (PRM). The cancellation of loan savings will be effected upon approval by ADB's Board of Directors (the Board) to reallocate and transfer these funds to earthquake rehabilitation and reconstruction activities. Reallocation will take place immediately upon cancellation.
To effect the transfer of these loan savings to earthquake rehabilitation and reconstruction efforts as requested by the Borrower, it is proposed to use the Emergency Earthquake Assistance Project (EEAP) to absorb these surplus funds.
The proposal for Board approval to redirect loan savings to a disaster and emergency assistance project is in accordance with the Disaster and Emergency Assistance Policy, Operations Manual. It is also in line with the Government's earlier request for approval of loan savings from eight Asian Development Fund (ADF) loans of up to an amount of $105 million equivalent to be used as quick-disbursing support for earthquake rehabilitation and reconstruction6 activities.
Board approval encompassed the cancellation of up to $105 million from the eight ADF projects and the transfer of up to $105 million to Loan 1936-PAK (SF) : Decentralisation Support Program8 (DSP). An amount of $85 million was disbursed and the remaining balance (depending on the available savings in the eight identified loans) was to be released before 30
June 2006, the closing date of DSP. However, the remaining balance of $20 million did not materialise before closing of DSP, due to the non-availability of further loan savings.