ABD to Lend $7.528 billion to Pakistan for Development Projects

ADB Disbursed $2.4 Billion as Loans and Grants to Pakistan in 2019

Asian Development Bank (ADB)’s loan and grant disbursements to Pakistan amounted to $2.4 billion in 2019, comprising $1.8 billion in program lending and $634.3 million in project lending.

The bank in its review released on Friday stated that it has provided $1.8 billion in policy-based loans, including $1 billion in immediate budget support to shore up the country’s public finances and $500 million to improve trade competitiveness.

ADB also provided additional financing of $200 million to help support the Benazir Income Support Program (BISP) — part of the government’s flagship Ehsaas Poverty Alleviation Strategy aimed at reducing inequality and investing in economically disadvantaged people.

It also approved a $235 million loan to Sindh in 2019 to help develop a bus rapid transit (BRT) system with innovative energy and climate resilience features in Karachi, Pakistan’s largest and most populated city.

ADB also approved a $75 million project to enhance secondary education in Sindh. To help strengthen project readiness prior to approval, ADB approved project readiness financing totaling $17.3 million in 2019 for improvement projects in Khyber Pakhtunkwa and a water resources project in Punjab.

In agriculture, ADB approved a major change in scope of Trimmu and Panjnad barrages adding Islam barrage by utilizing surplus loan proceeds of $21 million and initiated work on the $275 million Jalalpur irrigation project.

ADB approved a grant of $5.1 million for enhancing Punjab’s technology-based agriculture and marketing, market development and preparing Kurram Tangi integrated water resources development project. In the energy sector, ADB maintained its strong presence with an ongoing portfolio of $2.2 billion covering energy generation, transmission, distribution, energy efficiency, renewable energy development, and analytical tools and advisory assistance.

In 2019, ADB committed a $300 million policy-based loan that will help Pakistan to financial sustainability, governance, and address energy infrastructure policy constraints.

ADB’s ongoing portfolio in the transport sector totals $2.5 billion and spans urban corridors, border crossing points, green motorways and expressways, and existing national and provincial highways. In 2019, ADB committed a $75 million loan to widen and upgrade 42 kilometers of the busy Mardan–Swabi road in the Khyber Pakhtunkhwa province.

ADB successfully completed the flood emergency reconstruction and resilience project, under which 1,740 km of provincial highways and districts roads were rehabilitated flood affected districts of and repaired in 20 Punjab. Another 204 km of major roads were rehabilitated, and 75 km of district roads were repaired in the three districts. About 800 hectares of landslide area was stabilized in the three northern districts using bio-engineering measures. The project also rehabilitated 90 percent of flood protection infrastructure.

Two new the flood protection bunds are built along both banks of the river Jhelum with a cumulative length of about 7,300 meters. The project also developed the safety inspection manuals for flood protection infrastructure.

ADB is also actively supporting Public Private Partnership initiatives of the provinces and the federal government to support the delivery of public infrastructure with private sector participation, along with development of fiscal risk management functions.

ADB is implementing two loans of $100 million each for the provinces of Sindh and Punjab, with a co-financing grant from DFID. The projects are supporting PPPs in the provinces by augmenting the resources for project development facility and gap funding to structure and develop more viable PPP projects that offer value-for-money.

In 2019, ADB helped complete the 125-kilometer Motorway M4 (Gojra-Khanewal section). The ADB-administered M4 project was financed with AIIB, alongside a grant from DFID. This was AIIB’s first-ever project.

The Pakistan National Transport Policy and Maser Plan supported by ADB and DFID was officially launched following its approval by the federal cabinet in 2018, and road safety and road asset management secretariats promoted under the National Transport Policy were established. ADB secured financing of $49 million ($37 million loans and $12 million grant) from the Green Climate Fund-supplementing a proposed loan of $435 million. $235 million was from ADB and $100 million each from the Asian Infrastructure Investment Bank (AIIB) and Agency Française de Développement — to build a 26.6-km state-of-the-art BRT system in Karachi.

Commitments in non-sovereign operations funded by ordinary capital resources for the period 2007 to 2019 totaled $767 million, with $15 million committed in 2019. A $15 million loan to Kashf Foundation was signed in August for the expanding access to credit for women project.

The funding will support Kashf Foundation’s lending to low-income women, female micro- and small entrepreneurs and low-cost schools in Pakistan. ADB’s Trade Finance Program (TFP) fill market gaps by providing guarantees and loans through partner banks in support of trade. In Pakistan, the TFP works with 13 banks and has supported $16.03 billion in trade and 5,159 transactions as of November 2019 – 52.9% of the $16.03 billion was co-financed by the private sector.

The supply chain finance program has supported $0.88 million in trade over 5 transactions as of November in Pakistan and mobilized $0.44 million in co-financing.

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