World Bank approves US $ 12 billion for Pakistan

ISLAMABAD: The World Bank’s Board of Directors, in a consensus decision, approved a total of US $ 12 billion worth loans for Pakistan to be disbursed in the next 5 years.

Pakistan Day was celebrated at the World Bank yesterday, and in the two Development Policy Credit (DPCs) US $ One billion was approved for energy and revenue support during the current financial year.

The other land mark achievement of the day was the approval of Country Partnership Strategy under which Pakistan will get US $ 11 billion in the shape of project loans and budgetary support, says a statement issued by the Ministry of Finance here Friday.

It may be mentioned that the World Bank loans are purely concessionary in nature with repayment schedule spanning over a period of thirty years including five years grace period and the interest rate will be nominal at the rate of 2pc per annum.

It is expected that US $ One billion will be transferred to Pakistan during the next week and it will increase Pakistan’s Forex Reserves substantially.

On receipt of US $ One billion, an equivalent amount of Rs.100 billion will be reduced from the domestic debt which is much more expensive at 12.5pc per annum.

The WB loan will incur 2pc interest per annum and the Government of Pakistan will be saving net 10.5% in payment of interest on Rs. 100 Billion. Resultantly, there will be no net increase in overall public debt.

The World Bank’s, Board of Directors, support and commitment with Pakistan reflects their confidence in the leadership and vision of Prime Minister Nawaz Sharif and his team led by Finance Minister Senator Ishaq Dar.

The Finance Minister has congratulated the whole nation on this success and observed that, the Country Partnership Strategy is aligned fully with the vision of Pakistan’s development challenges around the four ES “Energy, Economy, Extremism and Education,” based on the manifesto of the PML(N) and its commitment to the nation.