Minister for Economic Affairs Muhammad Hammad Azhar witnessed the signing of two loans amounting to $1.3 billion between the government and the Asian Development Bank (ADB) for economic reforms.
The loan agreements were signed by Economic Affairs Division Secretary Dr Syed Pervaiz Abbas and Asian Development Bank Country Director Xiaohong Yang. Under special policy-based loan facility, the Asian Bank has committed to providing one billion dollar for the economic stabilization programme.
Officials said that the initiative aims at improving exchange rate management, strengthen public financial management to mobilize more revenues, restore allocated efficiency of scarce public resource, address power sector pricing issues and reduce social impacts of macroeconomic stability measures by the improved targeting and transparency of existing social protection programmes.
Out of total $1.3 billion loan, $300 million is allocated to the energy sector reforms and financial sustainability programme. It will address issues regarding energy shortfalls, technical lacuna’s and policy-related shortcomings in the energy sector.
The programme will help to secure financial sustainability by controlling new accumulation of circular debt; strengthen governance by rationalizing competitive market roadmap, 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 Hammad Azhar acknowledged the bank’s continued support for Pakistan and said that the ADB’s policy-based lending would not only strengthen foreign exchange reserves of the country but would also provide fiscal space to the government for implementing its reforms agenda and boost economic activities.
He said that the provision of the programme lending by the Asian Development Bank is indicative of the government’s successful policies for macroeconomic stability and reforms. Xiaohong Yang said that the Asian Bank is one of the leading development partners of Pakistan and the bank fully supports the government’s development vision and policies.
She said that the bank is providing its support to the government for policy reforms and project financing in key priority areas such as energy, road, social sector, water and irrigation and urban services. She said that the bank is committed to providing wide-range financing options to strengthen Pakistan’s economy and reduce risk of external shocks. She reiterated the bank’s strong commitment to expand its partnership with Pakistan.