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New ADB loan

New ADB loan

According to newspaper reports, the Asian Development Bank has unveiled a three-year business plan for Pakistan to improve energy, transport, agriculture, water, public sector management, finance and social sectors.With a total outlay of $4.673 billion, at least $3.39billion will be given from regular ordinary capital resources and $1.28 billion from concessional lending. Reports suggest, Pakistan will avail its group ‘B’ category as a developing member country to get the money from ordinary capital resources and concessional lending. Still the final allocation of the loan will depend on the availability of the resources and performance of the country. The reports also suggest that the business plan is aligned with the country partnership strategy programme which was earlier launched in 2015 to support the objective of high, sustained and inclusive growth. The new loan programme is also aligned with the ‘Vision-2025’ development strategy of the government, which covers the development plans of the provincial governments.The fact is that the loans and grants in a stable political government are a routine matter, but it is yet to be seen who in the current government are involved in this kind of venture.The country is passing through political chaos and instability whereas the new elections are round the corner. In this situation, it does not make sense tonegotiate a new loan programme without clearly mentioning the areas of concern.

According to the report, at least $1billion will be spent on hydropower development with focus on clean energy and hydropower generation. Two multi-tranche financing facilities are already going on to improve development of the power transmission and distribution. The project also covers transmission system improvementwith focus on renewable energy. The report claims that investment in the Infrastructure Development Fund will support long-term project finance whereas the National Disaster Risk Management Fund will enhance the country’s resilience and response to climatic changes and natural hazards. The bank will also extend technical assistance to support policy and project development as well as to enhance quality and readiness of the project.

There is a need to enact laws to bind the government to take approval from parliament to accept loans and grants from foreign financial institutions. The political governments obtain wholesale loans and finish their terms, leaving burdens of their mistakes and blunders on the shoulders of the nation. The foreign financial institutions are ready to extend loans even for ambiguous projects.