The Asian Development Bank (ADB) has approved the lending plan of $10 billion in fresh assistance to Pakistan over the next five years to speed up economic recovery process.
According to the media reports, ADB will provide these loans from 2021 through 2025, which also includes $6.3 billion that it plans to approve in the next three years.
However, the actual approval and disbursement of these loans will depend on Pakistan’s ability to meet conditions and timely process loan documents.
About one-fourth of the total loans will be concessionary at around 2% interest rate and remaining loans will cost Islamabad the London Interbank Offered Rate (Libor) plus 0.5%.
The Manila based lender stated that the novel coronavirus pandemic had interrupted macroeconomic recovery in Pakistan, resulting in a sharp shrinkage in growth, rise in public expenditures, and loosening of monetary policy to mitigate the health and economic impacts.
It may be recalled that in November 2020, a virtual meeting was held between the Federal Minister for Economic Affairs Makhdum Khusro Bakhtyar and Asian Development Bank (ADB) Vice President Shixin Chen. Secretary Economic Affairs Division Noor Ahmad and ADB’s Country Director also attended the meeting.
The meeting discussed key priorities of the Country Partnership Strategy (CPS 2021-2025) expected to be approved by ADB’s board of directors in January. The meeting also discussed County Operations Business Plan (COBP 2021-2023) and ADB’s ongoing support for Pakistan’s reforms programme.