Hydropower, water projects: Ministry agrees to allocate Rs100bn as IBC

According to reliable sources, the Ministry of Planning, Development, and Special Initiatives (MPD&SI) has agreed to set aside Rs 100 billion as an Indicative Budget Ceiling (IBC) for FY 2023-24, including foreign funding for hydropower and water projects.

M/s PD&SI has requested the Ministry of Water Resources to finalize the PSDP 2023-24 budgetary recommendations while adhering to the following basic policy guidelines and rationalization criteria: (i) The PAO in question is required to fully comply with the provisions of the Public Finance Management (PFM) Act, 2019, particularly Chapter-l on development projects, guidelines and procedures contained in the Financial Management and Powers of PAOs Regulations 2021, Cash Management and Treasury Single Account (CM&TSA) Rules 2020, Budget Manual 2020, and instructions contained in the Budget Call Circular by Finance Division of January 25, 2023; and (ii) guidelines contained in the PSDP call (iii) PSDP FY 2023-24 may place a special emphasis on climate change mitigation (green budgeting), particularly in light of Pakistan’s C-PIMA, as well as other efforts such as gender budgeting.

When submitting project-wise budget proposals for PSDP 2023-24 within the allotted IBC, M/s PD&SI advises following these priorities and guidelines:

(a) Only technically approved projects should be included in the development budget, as stated in Chapter-III (17) (1) of the Public Finance Management Act, 2019. (b) Fully fund projects with 80% or more expenditure to ensure their scheduled completion by June 2024. (c) Give top priority to ongoing core projects of national significance, following approved phasing in PC-1’s in accordance with Chapter III (17) (2) of the PFM Act 2019. (d) Prioritize the consolidation of federal projects over provincial projects. (e) Provide the necessary rupee cover to foreign-funded fast-moving projects to meet international obligations within the allotted IBCs.(f) Assign importance to projects supporting the CPEC initiative, productivity, exports, IT and S&T (R&D), under 5Es and 4RF frameworks, and better governance. (h) Follow the procedure to clear pending liabilities of closed projects approved by Ecnec on April 6, 2023, and notified by the Ministry on May 10, 2023(i) Consider projects on an innovative financing basis (VGF and PPP), involving cost and responsibility sharing for O&M.

The Principal Accounting Officer (PAO) shall allocate adequate funds in the FY 2023-24 to clear the pending liabilities of ongoing budgeted projects on priority.

The Water Resources Division has also requested that its demand/portfolio be rationalised while keeping the following criteria/directions in mind: (i) While submitting budgetary proposals for both ongoing and new projects, projects may be listed in order of priority within the given IBC; (ii) on-going projects budgeted during 2022-23 may be listed under the same PSDP No. for financing during 2023-24; (iii) non-performing/non-starter projects since the last two years may be reviewed for funding; (iv) un-approved projects should not be included in the budgetary proposal; (v) funding of projects/

Sponsors may approach Finance Division for such activities; (vi) foreign-aided projects where foreign aid has not yet been lined up/no disbursement received in the last two to three years may be considered for deferment for funding during 2023-24; (vii) no funds shall be kept for any lump provision or unidentified expenditure; (viii) matters related to PSDP funds grant as Cash Development Loan (CDL), if any, may be settled with Finance Division on a priority basis; and (ix)

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