AfDB has disbursed $28 billion in loans to Pakistan since 1966
ISLAMABAD: Out of a total of 723 committed public sector loans, grants and technical assistance of $37 billion, the Asian Development Bank (AfDB) has disbursed cumulative loans and grants of $28 billion for Pakistan since its inception .
The AfDB committed very meager resources to education since its share amounted to 1.2%, health to 3.35% and information and communication technologies to 0%. Much of the resources went to the energy sector as 21.11% of the resources were provided, but it remained one of the most inefficient sectors in Pakistan.
The AfDB has allocated more resources to trade and supply chain and public sector management. The report also highlights that the AfDB evaluated 32 sovereign projects and programs in Pakistan over the past 10 years and found that 17 programs were highly successful, 10 less successful and five unsuccessful. Out of 10 non-sovereign programs/projects, seven were very successful and three failed.
According to a fact sheet published by the AfDB on Pakistan, it is stated that Pakistan was a founding member of the Asian Development Bank (ADB) in 1966. Since then, the AfDB has helped the country to reduce poverty and improve the country’s prosperity and resilience by supporting infrastructure, urban services, the private sector, energy and food security, transport networks and social services. In line with the government’s development vision, the AfDB’s Country Partnership Strategy 2021-2025 for Pakistan focuses on three priorities: improving economic management, building resilience, and boosting competitiveness and private sector development.
To date, the AfDB has committed 723 public sector loans, grants and technical assistance totaling $37 billion in Pakistan. Cumulative loan and grant disbursements to Pakistan amount to $28.27 billion. These were financed through ordinary and concessional ordinary capital resources, the Asian Development Fund and other special funds. AfDB’s ongoing sovereign portfolio in Pakistan comprises 48 loans and 3 grants worth $8.42 billion. In 2021, AfDB loan and grant disbursements in Pakistan amounted to $1.31 billion, including $0.3 billion in program loans and $1.01 billion in project loans and 3 million dollars in donations. AfDB support for Pakistan’s coronavirus disease (COVID-19) pandemic response in 2021 included a $500 million loan in August to help procure and deploy a safe and effective vaccine, and a $603 million loan, including $3 million from ADF, for an integrated social protection program to strengthen Pakistan’s flagship Ehsaas program. The loan is complemented by a $24 million grant from the Education Above All Foundation. The program builds on a previous loan of $500 million under the AfDB’s COVID-19 Active Response and Expenditure Support Program and a $300 million emergency assistance loan to strengthen Pakistan’s public health response to protect the poorest families from the pandemic.
The AfDB has committed $300 million for the construction of the Balakot Hydroelectric Power Station on the Kunhar River near the town of Balakot in Khyber Pakhtunkhwa. By 2027, the plant will add 1,143 GW hours of clean energy per year to the country’s energy mix, improving the reliability and sustainability of the energy sector. Another $300 million policy-based loan has been committed to support reforms aimed at strengthening Pakistan’s energy sector and improving its financial sustainability. The program will help to reduce and manage the cash deficit accumulated throughout the electricity supply chain, known as circular debt. The AfDB continued to strengthen Pakistan’s financial sector, develop competitive capital markets and encourage private sector investment. The AfDB has pledged to provide a loan of $235 million to continue the upgrading of the 222 km Shikarpur-Rajanpur section of National Highway 55, which will change from two lanes to a four-lane carriageway, linking the ports of Karachi and Gwadar in southern Pakistan to national and international economic hubs. North.
As part of the Country Partnership Strategy 2021-2025, the AfDB will support Pakistan’s development priorities focusing on improving economic management, building resilience and boosting competitiveness and development from the private sector. AfDB assistance for domestic resource mobilization, financial inclusion and energy sector reforms will support macroeconomic management. Funding for workforce readiness and health will help build resilience. Support for infrastructure and urban sector investments will improve rural connectivity and urban municipal services. Improving access to finance and supporting public-private partnerships will boost competitiveness and private sector development to put the economy back on a sustainable growth path. The AfDB will also help the country prepare for digital transformation through policy improvements, strengthening public institutions and investing in relevant infrastructure, the report concludes.