ISLAMABAD: Pakistan has requested the Asian Development Bank (ADB) to double loan size of the energy sector reforms programme to $800 million amid the country’s growing dependence on foreign lenders to meet its budgetary needs.
Finance Minister Ishaq Dar made the request to ADB Country Director Werner Liepach during a meeting held on Monday, officials said
The meeting had been called to review the Manila-based lending agency’s proposed $5.9 billion loan package under the three-year (2017-19) Country Operations Business Plan, said officials of the Ministry of Finance.
Of the original proposed loan size of $5.9 billion, $2 billion was in the shape of budget financing. However, the government desires that programme lending should be increased to $2.4 billion, as it seeks an additional $400 million in the name of energy sector reforms.
This will also increase the share of budget financing to over 40% of the proposed $5.9 billion loan package.
Originally, the ADB proposed $400 million for the energy sector programme in two equal tranches to be disbursed in 2017 and 2018. Dar insisted that instead of the $200 million tranche, the size should be doubled to $400 million, said the officials. The ADB country chief agreed to the government’s request.
The decision to increase the budgetary financing would further cut foreign loans for infrastructure projects despite a huge requirement for upgrading and expansion.