ISLAMABAD, Dec 9 (APP):Minister for Economic Affairs, Muhammad Hammad Azhar on Monday witnessed the signing of two loans programme amounting to US $1.3 billion between the government of Pakistan and the Asian Development Bank (ADB) for economic reforms.
The loan agreements were signed by Secretary, Economic Affairs Division, Dr Syed Pervaiz Abbas and Ms Xiaohong Yang, Country Director, Asian Development Bank (ADB). Under Special Policy-Based Loan (SPBL) Facility, Asian Development Bank has committed to providing US $1 billion for Economic Stabilization Programme.
This programme aims at improving exchange rate management, strengthen public financial management to mobilize more revenues, restore allocated efficiency of scarce public resource, address the power sector pricing issues and reduce the social impacts of macroeconomic stability measures by improved targeting and transparency of existing social protection programmes.
Out of total US $1.3 billion loan, US $ 300 million is allocated to Energy Sector Reforms and Financial Sustainability Program (Subprogram 1). It will address issues regarding energy shortfalls, technical lacuna’s and policy related shortcomings in Pakistan’s energy sector.
The programme will help to secure financial sustainability by controlling new accumulation of circular debt; strengthen governance by rationalizing competitive market road-map, separation of policy and regulatory functions in hydrocarbons sector, appointment of appellate tribunals, implementation of multi-year tariffs and un-bundling of gas sector and reinforce infrastructure improvements through integrated planning to facilitate public and private sector investment across the energy supply chain.
Minister for Economic Affairs, Muhammad Hammad Azhar acknowledged ADB’s continued support for Pakistan.
The minister said the ADB’s policy-based lending would not only strengthen the foreign exchange reserves of the country but would also provide fiscal space to the government for implementing its reforms agenda and boost economic activities in the country. The provision of programme lending by Asian Development Bank is indicative of government successful policies for macroeconomic stability and reforms, he added.
ADB Country Director Ms Xiaohong Yang said that the ADB was one of the leading development partners of Pakistan. ADB fully supports the government’s development vision and policies. She expressed that ADB was providing its support to the government for policy reforms and project financing in the key priority areas such as energy, road, social sector, water and irrigation and urban services.
ADB is committed to providing wide-range financing options to strengthen Pakistan’s economy and reduce the risk of external economic shocks, she added. She also reiterated ADB’s strong commitment to further strengthen and expand its partnership with Pakistan.