WB provides $800 mln program support to Pakistan

Secretary, Ministry of Economic Affairs, Mr. Noor Ahmed and Ms Melinda Good, Acting Country Director, World Bank signed the two important program loan agreements worth US$ 800 million on behalf of their respective sides, today in Ministry of Economic Affairs.

The signing of programs indicates the trust of International Financial Institution (IFI) on the present government and will augment the government’s efforts to address the direct and indirect impact caused by COVID-19 pandemic, strengthen the health & education systems essential for Human Capital accumulation and reduce circular debt flow etc.

The World Bank will provide US$ 800 million for key policy reforms in priority areas as under: ? Second Securing Human Investments to Foster Transformation–Development Policy Financing (SHIFT-II) Program worth US$400 Million: The development objectives of this World Bank funded program is to

(i) strengthen Civil Registration and Vital Statistics, health and education systems essential for Human Capital (HC) accumulation;

(ii) recognize the contribution of women to economic productivity; and

(iii) improve national safety nets to respond to shocks in a more efficient manner. ? Program for Affordable and Clean Energy – Development Policy Financing (PACE-DPF) Program worth US$ 400 million: The development objective of this program is to reduce circular debt flow through reducing power generation costs, de-carbonizing the energy mix, improving efficiency in distribution and retargeting electricity subsides.

Upon signing of the agreements, World Bank will disburse US$ 400.0 million immediately while disbursement of another US$ 400 million will follow in coming days.

This financial support of US$800 million under the said two programs will also help in improving the balance of payment, strengthening foreign exchange reserves. Secretary, Ministry of Economic Affairs thanked and appreciated the World Bank for extending timely support to the government at this difficult time when the country is facing increasing health-related and socioeconomic challenges amid COVID-19 pandemic. He also highlighted that, even at time of prevailing difficult situation, Government of Pakistan kept its focus on implementing structural reforms so that the economy regains its strength. The continued provision of budgetary support by the World Bank remains crucial in the implementation of structural reforms amidst a global pandemic crisis.

Ms. Melinda Acting Country Director, World Bank appreciated the reforms undertaken by the Government of Pakistan in the areas of Energy Sector and Human Capital Development in difficult times. She reiterated the commitment of the World Bank to continue to work together with the Government of Pakistan in the critical areas of the economy and achieving the objective of socio-economic development and poverty alleviation by upgrading the lives of millions of Pakistanis.