The Sindh Government is paying around Rs 1.5 billion per year as loan interest to the international financial institutions on the debts received. The official sources in Sindh Finance department told Business Recorder that the provincial government have to pay the stated amount apart from the payment of the instalments of the principal, to these financial organisations.
The officials also revealed that the foreign debt burden on the Sindh government has exceeded the figure of Rs 125 billion, adding that most of the amount was borrowed during the last four to five year period.
The amount, they maintained, was mainly borrowed by the previous government for execution of mega-development projects in the province. However, the officials were reluctant to state the exact figures of these loans.
The Asian Development Bank (ADB) and the World Bank (WB) are the biggest lenders to the Sindh Government, accounting for more than half of the total debts, sources added.
Borrowing of these debts are primarily aimed to continue the development of the ongoing projects, as well as to undertake new uplift schemes in the province, sources said.
The officials also maintained that the total foreign debts on the province might go up to Rs 240 billion, as the Sindh government is likely to receive another Rs 116 billions in coming years in pursuant to several agreements with ADB and WB for various future projects.
The Sindh Government, they said, is receiving most of the debts from these international financial institutions, for projects of infrastructure development, health, education, irrigation, local government, oil, gas and coal exploration and agriculture sectors.
The government is also receiving a handsome amount of aid, aggregating billions, from several international donor agencies for various reform programmes, sources added.
The biggest amount of aid, the Sindh government has received so far, was for the projects of education, and then health sectors, sources said. They said that the World Bank is also collaborating with the provincial government besides providing technical assistance for the education and irrigation reforms, but the sources refused to quote the actual amount of aid received by the Sindh Government, maintaining that it would be difficult to calculate the actual amount of aid, as many of the projects were still in progress, and their funding matters were directly supervised by the donor organisations.