$250m Policy-Based Loan Deal Signed with ADB

ISLAMABAD: The Asian Development Bank (ADB) and the Government of Pakistan on Friday signed the agreement for a $250 million policy-based loan to assist Pakistan drive sustainable investments in infrastructure and services through public–private partnerships (PPPs).

ADB Country Director Yong Ye and Secretary EAD Kazim Niaz signed the agreement.

Yong Ye underscored the importance of a conducive enabling environment to foster strategic and fiscally affordable PPPs in Pakistan.

The programme’s core objective is to strengthen the governance framework and enabling environment for public–private partnerships (PPPs) at the federal government level, by strengthening the: (i) policy, legal and institutional frameworks for Public Investment Management (PIM) and Public Financial Management (PFM) for PPPs; and (ii) national and sectoral infrastructure planning and PPP project preparation.

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Dr Kazim Niaz thanked ADB for its continued support for Pakistan’s critical development needs and rehabilitation efforts in the post-flood context. The programme loans support the Government’s reform agenda, Balance of Payment (BOP), and contribute to the macroeconomic stability of the country.

Dr Kazim Niaz stated that the programme would go a long way in realisation of the Prime Minister’s vision of greater involvement of the private sector in the development process.

The ADB on June 5 approved a $250 million policy-based loan for Pakistan.

The ADB’s Promoting Sustainable Public–Private Partnerships Programme supports implementation of government policies to create an enabling environment for fiscally affordable PPPs and promote inclusive economic growth.

The ADB’s programme supports reforms that will increase the absorptive capacity of PPP infrastructure investments by creating a more robust and integrated legal and institutional framework for public investment management and public financial management for PPPs.

The programme supports implementation of an integrated PPP policy. The reforms will facilitate efficient infrastructure planning and promote sustainable development practices in infrastructure projects, such as climate risk screening and gender considerations in project feasibility assessments and PPP contracts.

A $700,000 technical assistance grant is financing the programme’s preparation and implementation. In December 2023, an additional $950,000 was approved by ADB to support PPP pipeline identification, capacity building, and sector strategy development.