Asian Development Bank to give $350m for Energy Sector Reforms
- ADB is set to approve the energy sector reforms and financial sustainability program worth $350 million.
- The program will address fiscal, governance, technical and policy deficits in Pakistan’s energy sector.
- The Asian Development Bank is one of the leading development partners of the country that fully supported the government’s vision and policies.
The Asian Development Bank is going to approve the energy sector reforms and financial sustainability program worth $350 million.
The program aims to address fiscal, governance, technical and policy deficits in Pakistan’s energy sector. The deficits have badly impacted the sector’s quality and efficiency of services.
It also impacted the sustainability of energy infrastructure and finances, thus challenging Pakistan’s fiscal balance and macroeconomic stability.
The energy sector reforms and financial sustainability program will cost $350millio. Out of this, the Asian Development Bank will provide $300milllion and the Export-Import Bank of Korea $50million for the program.
The Ministry of Finance will execute the project in collaboration with the Asian Development Bank, while the Ministry of Energy will be the implementing agency.
From next month the Asian Development Bank will start loan negotiations with the government and it is expected that the loan signing and effectiveness of the loan will take place in November this year.
The proposed program is conceived in close coordination with key development partners and underpins the International Monetary Fund’s $6billion extended fund facility.
The policy-based loan and programmatic approach will finance three sub-programs in 2019-23. With the help of interlinked policy actions, reform areas of the three sequenced sub-programs are underpinned on strengthening governance, securing financial sustainability and reinforcing infrastructure improvements.
Over the next three years, Pakistan will also get $7 billion in fresh assistance from the Asian Development Bank for various development projects.
This assistance is aimed at developing the country’s social security, urban services, transport, agriculture and water resources, education, trade, and tourism.
Earlier, the Vice President of Asian Development Bank (ADB) visited Pakistan and met Prime Minister Imran Khan where it was decided that ADB will start a new Country Partnership Strategy (CPS) which in line with the Pakistan government’s economic development program.
Five Year Country Partnership Strategy:
Asian Development Bank is planning to start a five-year Country Partnership Strategy (CPS) from 2020 to 2024. This Country Partnership Strategy will be according to the government’s economic development program as well as ADB’s 2030 Strategy.
The new Country Partnership Strategy will define development priorities to support Pakistan’s economic transformation programs and will also complement efforts by other development partners.
Over the last five decades, ADB has an enduring development partnership with Pakistan, Pakistan and ADB have worked together to develop the country’s key infrastructure; promote exports and private sector efficiency.
It also worked to reform public sector management, develop the country’s financial market, improve urban services, provide emergency assistance, and prioritize social sector development.
The Asian Development Bank is committed to supporting the government’s reform agenda to promote inclusive and sustainable economic growth, develop key infrastructure, strengthen regional cooperation, attract investments, and promote industry and the private sector.
Furthermore, the Asian Development Bank signed a $500million loan agreement with Pakistan to support the first phase of the Trade and Competitiveness Program in the country.
The Trade and Competitiveness Program would help Pakistan in promoting macroeconomic stability, boost economic growth by facilitating improved trade competitiveness and improve export performance.
Policy-based lending by the Asian Development Bank will not only strengthen the foreign exchange reserves but will also provide fiscal space to the government and boost economic activities in the country.
ADB – Pakistan’s Leading Development Partner:
Due to weak and unbalanced growth, Pakistan is facing economic challenges and its economy is at a critical juncture and needs an ambitious and bold set of reforms.
Pakistan has received billions of dollars in financial aid packages from friendly countries like China, Saudi Arabia and the UAE in recent months.
According to the Economic Survey 2018-19, Pakistan’s economy grew at an average rate of 3.29% in the fiscal year 2018-19 against an ambitious target of 6.2% set in last year’s budget.
The Asian Development Bank (ADB) is one of the leading development partners of the country and fully supported the government’s vision and policies.
The ADB is providing its support for policy reforms and project financing in the key priority areas such as energy, road, social sector, water and irrigation, and urban services.
The incumbent government is committed to a range of structural reforms to the country’s trade environment in order to improve its export performance, reduce the current account deficit, and drive economic growth.