Pakistan seeks $900m ADB loan

(From our correspondent)
Filed on August 2, 2008

ISLAMABAD - Pakistan has urgently sought $900 million from the Asian Development Bank (ADB) to improve its fast depleting foreign exchange reserves. Informed sources said that the ADB which had earlier disbursed $850 million, out of $1.9 billion lined up for calendar year 2008, has been requested to rescue the government by releasing preferably in one tranche the amount of $900 million in August this year.

This funding is meant for improving energy sector and infrastructure development programme in the country.

Sources said that Pakistan has been advised to achieve financial discipline to improve the deteriorating economy. The bank has also called for establishing more Independent Power Plants (IPPs) by the private sector to meet 7000MW of electricity shortage.

It asked the government to settle tariff related issues to attract more IPPs in the country. The government was told that the bank has launched a new long-term Strategy 2020 "refocussing" its operation in Asia and Pacific on three point development agenda that included growth, environmentally sustainable growth, and regional integration.

The Strategy 2020 reshapes, redirects, and repositions ADB for a more innovative and effective development role in rapidly changing the region and within international aid architecture. It sets ADB's new strategic course, emphasising that poverty reduction can only be sustained if more people are economically productive.

Pakistan was told that by 2012, 80 per cent lending will be in five core operational areas identified as ADB's comparative strengths infrastructure, environment, regional cooperation and integration, finance sector development, and education. By 2020, about 50 per cent of operations will be in private sector development and private sector operations and 30 per cent in regional cooperation and integration. ADB will continue to operate on a more selective basis in health, agriculture, and disaster and emergency assistance.

Strategy 2020 identifies drivers of change that will be stressed in its operations developing the private sector, encouraging good governance, supporting gender equity, and helping developing countries gain knowledge.

It emphasises ADB's commitment to partner with other development institutions, the private sector, and community-based organisations.

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