International loans / Grants Updates

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The Asian Development Bank (ADB) will disburse over $1.5 billion to Pakistan in the current calendar year for support in regards to the balance of payment once the International Monetary Fund (IMF) Extended Fund Facility (EFF) programme restores.

Official sources revealed that the government had requested the bank in June 2022 to expedite the approval process and subsequent disbursement of around $2 billion to support the balance of payment. The matter was also raised in a call on the meeting of the Country Director of Asian Development Bank, Yong Ye, with the Federal Minister for Economic Affairs, Sardar Ayaz Sadiq.

Sources further revealed that ADB has a current portfolio of around $8.5 billion and 40 ongoing projects

 

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CASA-1000: NTDC seeks $35m financing​

Aug 12, 2022
BR
MUSHTAQ GHUMMAN

ISLAMABAD: National Transmission and Despatch Company (NTDC) has sought additional financing of $35 million for additional activities of the “challenging” Central Asia- South Asian Electricity Transmission and Trade Project (CASA-1000), well informed sources told Business Recorder.

According to the Aide Memoire, original cost of the project was $ 185 million, of which $ 92.66 million has already been disbursed whereas $ 46.74 million is to be released during current financial year. The closing date project will be extended by about three years from March 31, 2023 to December 31, 2025.

A World Bank Team led by Anthony Granville carried out the Implementation Mission from June 27 to July 7, 2022 to review the implementation of the project. The main objectives of the Mission were to: (i) discuss the implementation of the CASA-1000 Project; (ii) review project status, including procurement, contact management, financial management, disbursement, and reporting under the Projects; (iii) review the implementation status of the Converter Station and Electrode Station and line; (iv) get an update on the implementation of the Resettlement Action Plan (RAP); (v) Account Bank procurement; (vi) Technical Code; and (vii) the project restructuring process required from Pakistan.

The WB team met with the team leaders of the CASA-1000 project of NTDC. The Mission also met with representatives from the Ministry of Energy (Power Division) and the Ministry of Economic Affairs (MoEA). The Aide Memoire summarizes the implementation progress, key issues discussed, and agreements reached with NTDC.

The Bank in its Aide Memoire said that since all contracts have been awarded and are under implementation, the rating of the progress towards achievement of the objective of the project, which is to create the conditions for sustainable electricity trade between the Central Asian countries of Tajikistan and Kyrgyz Republic and the South Asian countries of Afghanistan and Pakistan is moderately satisfactory, while the overall implementation progress rating is also moderately satisfactory.

The Bank says contract of package TWO1- is the design, engineering and construction of 1100 Mega Watt (MW) High Voltage Direct Current (HVDC) converter station and electrode station at Nowshera, Pakistan - signed on September 21, 2018. Currently, the engineering and procurement works are progressing as planned with civil works completed at about 54 percent, while the installation is at 5 percent with overall construction progress at about 29 percent.

NTDC reported to the Mission that there was an incident on two towers on the CASA-1000 500kV HVDC Transmission Line, which is under construction and financed by Islamic Development Bank (ISDB). The contractor of the line had informed NTDC through a letter of June 27, 2022 which was forwarded to the Bank on June 29, 2022 that on June 24, 2022, Towers # 184 and 185 of the 500kV HVDC Transmission Line were targeted by planting explosive material on both towers. Tower #184 sustained severe destruction, while the base of Tower #185 was partially damaged. NTDC security department along with Frontier Corps (FC) are currently investigating the incident and an updated report along with a remedial measure to avoid such incidents in the future would be forwarded to the Bank.

The mission was informed by NTDC of the need for additional funds to complete the CASA-1000 project in Pakistan. This additional fund requirement is largely borne out of the need to meet extra payment for additional activities to make CASA- 1000 operational such as, studies and implementation of reverse power flow from Pakistan to Central Asia and others. The expected amount of the additional financing shall be $ 35 million. NTDC will send a request letter for additional financing through its parent Ministry and the Ministry of Economic Affairs to the Bank for consideration.

It was agreed during the Mission that the current project closing date of March 2023 is no longer feasible, given several delays that the project has experienced. It was agreed that the project closing date should be extended to December 31, 2025, to allow the Afghanistan project to catch up and completed. NTDC will formally send a request letter for the project closing date extension to December 31, 2025 for the Bank’s consideration.

Pakistan is a recipient of a $600,000 grant for CASA-1000 project. NTDC had sought approval from the Bank to utilize this grant for a number of capacity building activities and the deployment of video conference facilities at several locations. The approval for several trainings at Lahore University of Management Sciences (LUMS) had been granted by the Bank but the Mission agreed that the remaining funds in the grant shall be concentrated on capacity building for NTDC staff who will manage the IMC facility. It was agreed that the specialized training shall target 36 NTDC staff that provides maintenance to the HVDC equipment. Also, because interaction with Tajikistan and the Kyrgyz Republic, where Russian is the official language, the learning of the Russian language shall be captured and included in the local training for CASA-1000 PIU team and other NTDC staff.

The Mission was informed that the Government of Pakistan had received the request from CASA member countries to have an Inter-Governmental Committee (IGC) meeting. However, this idea has since been dropped.

The Mission was informed that all civil works at the site would be completed by December 2022. All equipment at the warehouse in Karachi was to be brought to Nowshera and therefore, it was agreed that there will no more extension of the warehouse leasing in Karachi. The Mission observed and emphasized that the equipment at the site should be properly and carefully stored to protect from flooding.

The Mission was informed that the Government of Pakistan is still in the process of providing a reviewed version of the Account Bank Agreement. It is expected that before the end of August 2022, the revised version of the account Bank Agreement should be ready.

The Bank’s Aide Memoire further states NTDC team has finalized the land acquisition process for the covered area of (500x500m2) at Charsadda (Awan-Abad). The funds have been transferred to the district administration account in Charsadda, for early payment to the legal owners. The costs assessment of crops, trees and irrigation pumps have been evaluated and funds have been arranged by NTDC for the compensation to owners. The RAP for the electrode line has also been approved. NTDC will complete compensation payments of land acquisition and other entitlements per RAP before handing over the site to the contractor.

 

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Rs50bn loan from consortium of banks​

Aug 12, 2022

ECC decides to issue letter of comfort to PSO

ZAHEER ABBASI

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet decided to issue a letter of comfort to the Pakistan State Oil (PSO) for securing Rs50 billion loan from a consortium of banks on an urgent basis to fulfil international and domestic payment obligations.

The ECC meeting presided over by Finance Minister Miftah Ismail on Thursday also increased the price of imported urea, as well as, dealer margin.

In a summary on the syndicated running finance facility for the PSO, the Ministry of Energy – Petroleum division – argued that the PSO’s liquidity issues were discussed on 31st July 2022 ECC, wherein, the issue of government guarantee loan to ease out liquidity issues of PSO was also discussed.

The ECC was told that a consortium of banks was formed including ABL, NBP, MCB, UBL, and HBL for sanctioning a loan amounting to Rs50 billion to the PSO through a government guarantee. As the issuance of guarantee will take time, the banks have shown their willingness to initiate the process of issuing loan on letter of comfort.

The ECC has approved the proposal to issue a letter of comfort in favour of the PSO for raising a loan facility of Rs50 billion on an urgent basis. However, the Finance Division was asked to divert some other allocated guarantees to PSO without exceeding Rs105 billion domestic guarantee limit for the 1st quarter of the current fiscal year.

The ECC also gave approval of the government guarantee for the financing facility of US$ 142 million as loan in accordance with the facility agreement between Roosevelt Hotel Corporation (RHC) and the National Bank of Pakistan (NBP) on a summary moved by the Ministry of Aviation. The Aviation Ministry sought the issuance of a government guarantee in favour of the NBP.

The ECC meeting was further informed that as the hotel business had slowed down in the USA and around the world due to the Covid-19 pandemic; therefore, the RHC was shut down in December 2020 to avoid losses. A committee headed by the deputy chairman Planning Commission was constituted to look into the financial challenges of the RHC.

The ECC, on 2nd September 2020 had approved government support of US$ 142 million on the recommendation of the committee. The Finance Division arranged a financing facility as loan from the NBP. The ECC after discussion approved a government guarantee for the financing facility of US$ 142 million as a loan in accordance with a facility agreement between Roosevelt Hotel Corporation (RHC) and the National Bank of Pakistan (NBP).

The Ministry of Industries and Production tabled a summary for revision of the price of imported urea and stated that the price of imported urea stored in National Fertiliser Marketing Limited (NFML) warehouses is lower than the locally-manufactured urea.

In order to remove disparity in the prices of imported and locally-manufactured urea, the ECC approved the proposal that the Dealer Transfer Price (DTP) of 50kg imported urea may be revised upward at Rs1,805/bag by the NFML (exclusive of dealer margin of Rs145/bag) for the stocks sold between June 23 to July 25, 2022.

The ECC was requested that the DTP of remaining stocks held with the NFML may be further revised upward to Rs2150/ bag (exclusive of dealer margin of Rs50/ bag) with effect from July 26, 2022, onwards. The ECC further directed to fix the urea pricing and dealer margin in future with the prior approval of the ECC.

 

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ADB approves $100mn results-based loan for Khyber Pakhtunkhwa’s health sector​

• Programme will look to help improve the delivery of health services at secondary hospitals by modernising infrastructure and equipment among other objectives

BR
September 22, 2022


The Asian Development Bank (ADB) has approved a $100 million results-based loan to help strengthen secondary health care in Khyber Pakhtunkhwa, Pakistan, said the global lender in a statement released on Thursday.

The programme will look to help improve the delivery of health services at secondary hospitals by modernising infrastructure and equipment; ensuring clinical protocols, standards, and guidelines are implemented; and improving human resources planning and medicine supply chain management, the ADB said.

“While the coronavirus placed an enormous strain on essential health services in Khyber Pakhtunkhwa and across the country, Pakistan now faces unprecedented flooding exacerbating the risk of waterborne diseases,” ADB Director General for Central and West Asia Yevgeniy Zhukov was quoted as saying.

“This programme will make a key contribution to improving the quality of secondary hospital services in Khyber Pakhtunkhwa. And while it was conceived before the monsoon, it will also help people physically injured by the floods and support efforts to control the spread of infectious diseases.”

The ADB added that the provincial health sector faces significant challenges including outdated secondary health care facilities and equipment, and inadequate quality assurance standards and processes.

“ADB’s assistance will help sustain health reforms started by the provincial government and strengthen the resilience of the health systems to future pandemics,” said ADB Senior Health Specialist for Central and West Asia Hiddo Huitzing.

“It will benefit an estimated 38 million people, including women in need of maternal health care services, and will also create jobs in the health sector.”

The development comes as record monsoon rains in south and southwest Pakistan and glacial melt in northern areas triggered flooding that has impacted nearly 33 million people in the South Asian nation of 220 million, sweeping away homes, crops, bridges, roads and livestock in damages estimated at $30 billion.

In response to the floods, the ADB said it was preparing a significant response package to support people, livelihoods, and infrastructure immediately and in the long-term. The bank has already approved a $3 million grant to fund the immediate purchase of relief goods such as food supplies and tents.

On Wednesday, the international creditor in its report forecasted Pakistan’s economic growth to slow down to 3.5% in the ongoing fiscal year (FY2023) amid devastating floods, policy tightening, and critical efforts to tackle sizable fiscal and external imbalances.

 

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US extends $132 million debt relief to Pakistan after floods​

Reuters
September 30, 2022

ISLAMABAD: Washington on Friday rolled over an agreement to suspend service payments on $132 million of Pakistan's debt, the US embassy in Islamabad said, as the South Asian nation faces an economic crisis exacerbated by devastating floods.

Pakistan's economy is facing a balance of payments crisis, a widening current account deficit, a slide in its currency to historic lows, and inflation crossing 27%.

Devastating floods meanwhile engulfed large swathes of the country in late August, killing more than 1,500 people and causing damage estimated at $30 billion, fanning fears that Pakistan would not meet its debt obligations.

The US ambassador to Pakistan Donald Blome signed the agreement to extend the loan relief under the G20 debt service suspension initiative, the embassy said in a statement, adding: "Our priority is to redirect critical resources in Pakistan."

The rollover is related to the Paris club agreement in April 2020 to support 73 lower income countries during COVID, under which the United States provided relief on $128 million in debt to Pakistan.

The agreement to suspend payments on that debt, plus an additional $4 million, has now been rolled over again.

Pakistan's outgoing finance minister Miftah Ismail said last week that Islamabad was seeking debt relief from bilateral creditors in the wake of flooding, but emphasised the government was not seeking any relief from commercial banks or Eurobond creditors.

The country's bonds had slumped to just half their face value, after the Financial Times said a United Nations development agency was urging the cash-strapped country to restructure its debt.

Ismail said the $1 billion bond would be paid on time and in full due later this year.

 

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Pakistan has sought rollover of SAFE China deposits of $2 billion .

Ministry of Finance said ambassador of the People’s Republic of China called on Finance Minister Ishaq Dar where the latter sought Beijing's support for securing the rollover of SAFE deposits of $2 billion due in March 2023.

he new finance czar requested financial relief as the country’s economy is facing a balance of payments crisis, a widening current account deficit, rupee depreciation, and unprecedented inflation.

During the meeting, Dar commended support extended by Pakistan’s ‘all-weather friend’ in the refinancing of a syndicate facility of $ 2.24 billion.

 

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The Asian Development Bank (ADB) on Friday approved $1.5 billion in financing to help the government provide “social protection, promote food security and support employment” amid catastrophic flooding and global supply chain disruptions.

According to the statement issued by the ADB, the loan has been provided under the bank’s Building Resilience with Active Countercyclical Expenditures (BRACE) Programme.

It will help fund the government’s $2.3bn countercyclical development expenditure programme that is structured to cushion the impacts of external shocks, such as the Russian invasion of Ukraine, the statement said.

In the press release, ADB Central and West Asia Director General Yevgeniy Zhukov said Pakistan’s recovery from the Covid-19 pandemic had been impeded by external shocks.

He added that the programme would “help the government manage the impacts of high prices, increasing food insecurity, slowing business activity and reducing income for vulnerable groups”.

 

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Saudi deferred payment facility: Country imports $100m oil in September​

Tahir Amin
October 23, 2022

 

[Catalystic]

Pretty sure all this money ending up in london bank accounts of zardaris and sharifs
Bureaucracy and judges and generals get the rest
Nothing for the country or its commoners

 

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World Bank to provide more than $3bn for energy infrastructure development in Pakistan​

Tahir Sherani
November 7, 2022

The World Bank (WB) has agreed to provide more than $3 billion to Pakistan for infrastructure development in the energy sector, according to a press release issued by the Power Division on Monday.

The international lender will also provide assistance in the Dasu hydropower project. “The World Bank is assisting in energy efficiency and conservation programmes, apart from helping provinces in installing solar projects,” it said.

The development followed a meeting between the World Bank delegation and Minister for Energy Khurram Dastgir.

Dastgir informed the delegation that the government had taken “tough and difficult decisions” in the power sector, referring to the increase in electricity prices, which he said were “politically difficult” but the government was committed to ensuring sustainability in the energy sector.

“The minister said the government is committed to providing relief to the common man. The minister appreciated that the Bank recognised the challenges faced by the country and the difficult decisions taken in wake of it.”

He added that climate change had made a “devastating impact” on Pakistan’s economy and the energy sector.

The delegation was also briefed on the CASA-1000 and Dasu power projects.

Last week, the World Bank also signed two agreements with the government to extend $500 million worth of two separate loans to Punjab and Khyber Pakhtunkhwa.

The loans pertained to Punjab Resilient and Inclusive Agriculture Transformation Project worth $200 million and Khyber Pakhtunkhwa Accessibility Project worth $300 million.

 

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Pakistan to get $500m from AIIB for development programme​

Reuters
November 9, 2022

The logo of Asian Infrastructure Investment Bank (AIIB) is seen at its headquarter building in Beijing. — AFP/File
Finance Minister Ishaq Dar on Wednesday said Pakistan will receive $500 million as co-financing for a development programme from the Asian Infrastructure Investment Bank.

The Building Resilience with Active Countercyclical Expenditures Programme is an Asian Development Bank (ADB) financing programme to counter the social fallouts of economic crisis.

“These funds will be received by the State Bank of Pakistan within November 2022,” Dar tweeted.

Last month, the ADB signed an agreement with Pakistan to provide a $1.5 billion loan for budgetary support and help flood-related rehabilitation and reconstruction activities.
The loan, provided under the BRACE Programme, was provided to fund the government’s $2.3bn countercyclical development expenditure programme designed to cushion the impacts of external shocks, including the Russian invasion of Ukraine.

The $1.5bn loan was aimed to provide social protection, promote food security, and support employment for people amid devastating floods and global supply chain disruptions.

The State Bank later announced that it had received $1.5bn from the ADB “as disbursement of policy-based loan for the government of Pakistan”.

 

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World Bank to provide $1.3 billion to Pakistan for emergency, agriculture and housing relief​

Tahir Sherani
November 16, 2022

The World Bank (WB) said on Wednesday that it was planning to provide Pakistan $1.3 billion for emergency, agriculture and housing relief in the wake of catastrophic floods this year, according to a press release issued by the Ministry of National Food and Security.

The funds will be released after approval from the international lender’s board meeting in December, World Bank Regional Director for Sustainable Development John A Roome said in a meeting with Federal Minister for National Food Security and Research Tariq Bashir Cheema.

Separately, the World Bank has also agreed to provide the country with financial support for subsidising urea for flood-affected farmers.

During the meeting today, Cheema informed the delegation that the recent floods and rain had resulted in colossal losses for the farming community. “We are trying our utmost to provide relief and assistance to poor farmers and help them in rehabilitation,” he said.

While appreciating the support extended by the World Bank for flood relief and rehabilitation of the affected farmers, the minister said that the natural calamity was unforeseen and the affected farmers need a helping hand to recover and return to normal life.

Additional Secretary Muhammad Asif apprised the delegation that the Benazir Income Support Programme (BISP) database could help identify farmers for the targeted subsidy.

Moreover, the National Flood Response Coordination Centre (NFRCC) has developed a digital application which can help in delivering to the farmers, he highlighted.

Meanwhile, Cheema emphasised enhancing coordination between the federal government, provincial governments, the World Bank and other stakeholders to provide relief and help to the needy on the most urgent basis.

He also assured full support from the ministry for the projects and initiatives by World Bank in Pakistan. He said that relief and assistance to the farming community will help in achieving food security.

Earlier this month, the World Bank had announced that it will provide more than $3 billion to Pakistan for infrastructure development in the energy sector.

 

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Green Development Project: World Bank to provide soft loan of $200m to Punjab​

Recorder
November 22, 2022

LAHORE: The World Bank will give a soft loan of $200 million to the Punjab government for the ‘Green Development Project.’

Under the Green Project, the Punjab government will install air and water quality monitoring systems in 10 districts, including Lahore, Sheikhupura, Multan, DG Khan, Rawalpindi, Gujranwala, Vehari and other cities. The air quality monitoring systems and water quality monitoring stations will be installed at 30 and 15 places, respectively.

While chairing a meeting, here on Monday, the CM disclosed that a $50 million ‘Environment Endowment Fund’ will be established under the proposed green financing strategy.

Chief Minister Punjab Chaudhry Parvez Elahi, while chairing a meeting, said that an environment-friendly pilot project will be started in Lahore with 25 electric buses.

The legislation will be enacted to control the use of plastic for environmental improvement; he added. The solar panels will be installed on the roofs of government buildings under energy-efficient buildings plan in the divisions, while six DHQ hospitals had already been converted to solar energy, he explained.

Steel mills, rice mills, stone crushing, and leather processing industries will be included in the green investment project. Initially, loans of $30 million would be provided to 100 small industrial units; the CM said.

Moreover, during a meeting with a delegation of the dairy farmers association, the CM issued instructions for imposition of ban on the interprovincial transportation of maize in Punjab.

Copyright Business Recorder, 2022

 

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Pakistan receives $500m from Asian Infrastructure Investment Bank​

Dawn.com
November 29, 2022

the Asian Infrastructure Investment Bank (AIIB) had transferred $500 million to the State Bank of Pakistan (SBP).

“AIIB has transferred today, as per their board’s approval, to State Bank of Pakistan/Government of Pakistan $500 million as programme financing,” the minister said on Twitter

Earlier this month, the finance minister had said Pakistan would receive the funds as co-financing for a development programme.

The Building Resilience with Active Countercyclical Expenditures Programme is an Asian Development Bank (ADB) financing programme to counter the social fallouts of economic crisis.

Last month, the ADB signed an agreement with Pakistan to provide a $1.5 billion loan for budgetary support and help flood-related rehabilitation and reconstruction activities.

The loan, provided under the BRACE Programme, was provided to fund the government’s $2.3bn countercyclical development expenditure programme designed to cushion the impacts of external shocks, including the Russian invasion of Ukraine.

The $1.5bn loan was aimed to provide social protection, promote food security, and support employment for people amid devastating floods and global supply chain disruptions.

The State Bank later announced that it had received $1.5bn from the ADB “as disbursement of policy-based loan for the government of Pakistan”.

Early bond repayment​

Today’s inflow from AIIB comes amid growing uncertainty about Pakistan’s ability to meet external financing obligations with the country in the midst of an economic crisis and recovering from devastating floods that killed over 1,700 people.

Pakistan’s reserves with the central bank stood at $7.8bn as of November 18, barely enough to cover a month’s imports.

But on Friday, SBP Governor Jameel Ahmad said he expected external financing requirements would be met on time because of inflows from international lenders. He said the country will repay a $1 billion international bond on December 2, three days before its due date.

The bond repayment, which matures on Dec 5, totals $1.08bn, Ahmad told a briefing, according to two analysts who were present.

For this purpose, the governor said funding was lined up from multilateral and bilateral sources, one of which was the $500m from AIIB which Pakistan received today, to ensure the repayment would not affect foreign exchange reserves.

 

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Japan announces grant of $38.9m for Pakistan flood victims​

Naveed Siddiqui
December 7, 2022

Japan has announced its plan to provide a “grant assistance” of $38.9 million to Pakistan as part of the country’s supplementary budget to deliver life-saving aid to the flood victims, its embassy in Islamabad said on Wednesday.

In August of this year, the world watched in horror as Pakistan was struck by unprecedented floods that rendered over one million people displaced and around 1,700 dead.

According to the Japanese Embassy statement, the projects will commence in January 2023 and Tokyo “will support the affected population in various social and economic dimensions in partnership with WHO, UNFPA, FAO, UNDP, UNICEF, WFP, UNWOMEN, UNHCR, and IPPF in Sindh, Khyber Pakhtunkhwa, Balochistan, and Punjab provinces, as well as the Islamabad Capital Territory.”

The statement added that the proposed areas for support included “emergency medical assistance, food distribution, agriculture and livestock restoration, livelihood recreation, and gender-based violence risk mitigation and response.”

It pointed out that “the unprecedented levels of flooding have triggered a multi-dimensional humanitarian crisis, leaving the affected population with increased health risks and food insecurity, insecure livelihoods, and heightened vulnerabilities to gender-based violence.”

The communiqué said the Japanese government “will also provide support through JICA, equivalent to $4.7m, for recovery from the floods in health, agriculture, education, gender, and resilient disaster management.”

The statement also highlighted how Japan provided $7m as an emergency grant to address the immediate impact of the floods earlier in September.

“The Government of Japan, with a long-standing partnership with Pakistan, stands ready to support the people of Pakistan to overcome the ongoing humanitarian crisis,” it said.

This year’s flood catastrophe has been compared to the 2010 floods that left almost 20 per cent of Pakistan’s population homeless, destroyed homes, crops, and infrastructure, and left millions vulnerable to malnutrition and waterborne diseases.

In October, the UN revised up its humanitarian appeal for Pakistan five-fold, to $816m from $160m, as a surge of water-borne diseases and fear of growing hunger posed new dangers after weeks of unprecedented flooding.

Latest data and estimates show nearly 1,700 people have been killed in the floods and their aftermath caused by heavy monsoon rains and melting glaciers.

Thousands more have been displaced and the UN has sounded the alarm on the rise of water-borne diseases in the country, particularly among the flood-hit population.

Government estimates the cost of the damage at $30 billion, and both the government and the UN have blamed the catastrophe on climate change.