The Economics Affairs Division (EAD) and the Asian Development Bank (ADB) signed the policy based loans of $1.3 billion on Monday, informed Minister for Economic Affairs Hammad Azhar.
In a tweet, the federal minister said that the loans will be disbursed today (Monday) and would “help bolster reserves and strengthen our economic outlook.”
Economic Affairs Division and ADB have signed policy based loans of USD 1.3 Bn today. The sums will be disbursed today and will help bolster reserves and strengthen our economic outlook.
— Hammad Azhar (@Hammad_Azhar) 9 December 2019
The agreement was signed by Economic Affairs Division (EAD) Secretary Syed Pervaiz Abbas and Asian Development Bank (ADB) Country Director Xiang Yang in Islamabad. Federal Minister Hamad Azhar was also present at the ceremony.
Hammad said that the disbursement reflects the confidence that multilaterals hold in the government’s reform agenda and the progress achieved towards economic stabilization, adding that ADB is a valuable contributor in Pakistan’s development path.
The ADB on Friday approved $1 billion in immediate budget support to Pakistan, aiding the country’s public finances and strengthening a stagnating economy. The bank further approved $300 Million to reform Pakistan's energy sector.
“The quick dispersing Special Policy-Based Loan is part of a comprehensive multidonor economic reform program led by the International Monetary Fund (IMF) to stabilize Pakistan’s economy after a major deterioration in its fiscal and financial position in mid-2018 caused growth to slump and threatened progress in alleviating poverty,” ADB said in a statement.
Meanwhile, “the financing will support the first of three subprograms totalling $1 billion under the Energy Sector Reforms and Financial Sustainability Program,” stated ADB.
Pakistan is marred by economic challenges owing to a large balance of payments gap and critically low foreign exchange reserves together. Back in July, the IMF approved a three-year $6 billion Extended Fund Facility (EFF) to finance the government’s economic reform program.