ADB expected to lend $10bn to Pakistan in next five years to promote economic growth

Asian Development Bank (ADB) is expected to disburse a significant $10bn in programme and project financing to Pakistan in the next five years to promote inclusive and sustainable economic growth in the country, sources said yesterday.The Manila-based lender and Pakistani authorities have already finalised programme and project lending portfolio worth $7bn under the country operation business plan for the three years from 2020 to 2022.“ADB is likely to lend $3 to $4bn in the last two years under five years CPS (country partnership strategy) for which discussions are underway to identify potential areas,” said a well-placed source.ADB and Pakistan are preparing a new five-year CPS for 2020 to 2024 in the aftermath of an International Monetary Fund’s loan programme that the country signed last month. The new CPS would define development priorities to support economic transformation programmes and is aligned with the government’s development vision and ADB’s 2030 strategy.The new strategy would also complement efforts by other development partners. ADB Vice President Shixin Chen said the bank is committed to support the government’s reform agenda to promote inclusive and sustainable economic growth, develop key infrastructure, strengthen regional cooperation, attract investments, and promote industry and the private sector.“Over the last five decades, Pakistan and ADB have worked together to develop the country’s key infrastructure, promote exports and private sector efficiency, reform public sector management, develop the country’s financial market, improve urban services, provide emergency assistance, and prioritise social sector development,” Chen said in a statement on following the bank’s delegation two-day visit to the country.Chen met with the Prime Minister Imran Khan and officials during which he reaffirmed ADB’s support for the country’s development priorities.ADB would provide about $7bn in fresh assistance for various development projects and policy-based programmes during the next three years under its country operations business plan 2020-2022, aimed at developing the country’s social protection, urban services, energy security, transport, agriculture and water resources, education, trade, and tourism.“This will help spur inclusive and sustainable economic growth,” Chen said. Official documents showed that the three year programme covers $2.3bn for 2020, $2.08bn for 2021 and $2.590bn for 2022.In the first year, the pipeline of programme lending was proposed at $900mn, including $300mn for trade and competitiveness sub-programme, $300mn for financial market development programme and $300mn for energy sector resilience sub-programme-2.ADB and Pakistan further finalised $350mn for construction of hydropower project in Balakot.It planned to provide additional $200mn for National Disaster Risk Management Fund and also provide $200mn as multi-tranche financing facility for Central Asia Regional Economic Co-operation (Carec) investment programme.ADB planned to provide $150mn to improve health sector in Khyber Pakhtunkhwa. The projected loan is expected around $180mn for power transmission. ADB also decided to provide $100mn for Punjab’s Agriculture market development programme next year.The documents showed that of total $2.08bn proposed for 2021, ADB would provide $300mn for Kurum Tangi project, $100mn for climate policy sector development programme and $150mn for Greater Thal Canal.The bank would also provide programme lending of $300mn under energy sector resilience programme and $300mn for financial sector development programme. ADB planned to provide $150mn to support housing financing initiative.The lender decided to assist the government for its Ehsas programme as $300mn would be provided for integrated social sector development programme during the year.For 2022, the ADB would loan $2.590bn, including $140mn for power distribution programme and $200mn for power transmission programme. It would lend $240mn for Carec investment programme, including $150mn for railways connectivity in the region.