ECC Approves Rs. 4.98 Billion for Interest Free Loans Program

The Economic Coordination Committee (ECC) approved the allocation of Rs. 4.98 billion for implementation of the Interest-Free Loans (IFL) program by Pakistan Poverty alleviation fund. Adviser to the Prime Minister on Finance Dr. Abdul Hafeez Shaikh chaired the meeting of the ECC of the Cabinet here at the Cabinet Division.

Benazir Income Support Programme (BISP) has surrendered funds amounting to Rs.4.98 billion in favor of the Pakistan Poverty Alleviation Fund during the financial year 2020-21 which shall be used for the purpose of the IFL program.

On the summary moved by the Ministry of Information and Broadcasting (MoIB) for allocation of additional funds for the payment of media campaigns launched on 5th August (Kashmir Siege Day), Economic Coordination Committee (ECC) decided that ministry may meet the immediate fund requirement through re-appropriation from its budget allocated for the financial year 2021.

ECC also decided that any shortfall due to re-appropriation of the funds would be met through technical supplementary grant towards the end of the current financial year.

Ministry of Energy requested ECC to give directions for the settlement of a loan of about Rs. 7.6 billion and its associated costs from National Bank of Pakistan (NBP) in relation to advance payment for Karkey Karandeniz Elektrik Uretim (KARKEY). ECC decided that Finance division should engage with the NBP for the settlement of the loan. It was decided that a well-rounded proposal with all stakeholders on board would be presented before ECC for the final approval.

ECC in principle approved technical supplementary grant amounting to Rs. 72.635 billion to Power Holding Limited (PHL) for onward disbursements to respective banks or through financial instruments as and when due during the current financial year.

In an earlier decision, ECC had decided to shift the power sector debt stock of Rs.804 billion to public debt. As per debt repayment schedule agreed between PHL and lending institutions, an amount of Rs 72.635 billion were required to be paid partially during the FY 2019-20 and remaining is payable in 2020-21 as principal repayments to lenders.

Furthermore, the loan amounting to Rs. 82 billion taken from OGDCL and included in the total of Rs.804 billion is required to be considered separately through non-cash/cash settlements.

The ECC also formed a committee headed by Adviser to the PM on Institutional Reforms and Austerity Dr. Ishrat Hussain, Dr. Waqar Masood Khan, representatives of Finance and Power Divisions to prepare a proposal for the settlement of dues of the power sector and other related issues in a holistic manner for onward submission in ECC.

ECC allocated Rs. 10 billion from Stimulus Package for the payment of 1st installment of interest/ profit for the period of 21-05-2020 to 20-11-2020 in respect of Pakistan Energy Sukuk-II (amounting Rs. 200 billion).

The meeting was attended by Minister for Food Security, Syed Fakhar Imam, Minister for Planning, Development and Special Initiatives Asad Umar, Federal Minister for Industries and Production, Hammad Azhar, Adviser for Commerce, Abdul Razaq Dawood, Minister for Railways Sheikh Rashid Ahmed, Adviser to the PM on Institutional Reforms and Austerity Dr. Ishrat Hussain, Special Assistant to the Prime Minister on Revenue Dr. Waqar Masood Khan and Minister for Power Omar Ayub Khan. The SAPM on Petroleum Nadeem Babar and Governor State Bank, Syed Baqar Raza participated through video link.

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