Government approves costly $500 million loan from ADB.
By
April 3, 2024
The government approved getting a big loan of $500 million from the Asian Development Bank (ADB) to help attract private investment. But this move adds more debt to Pakistan’s already big debt problem.
This decision was made by the Central Development Working Party (CDWP) during a meeting chaired by Deputy Chairman Dr. Jehanzeb Khan.
The loan will be used to support the budget, and in return, Pakistan has to make new policies and agree to set up two funds. The ADB will give the money in two parts, with interest rates ranging from 2% to 6.5%. Most of the loan has to be paid back within seven years.
The government wants to use the loan to make it easier for private investors to put money into building things like roads, houses, schools, and hospitals. This should help improve these areas without needing more loans from foreign countries.
However, the government still has to meet some conditions to get the full loan. They need to make sure they have enough money in the budget to support the plans. They also have to establish two funds and follow specific regulations set by the ADB.
The Finance Minister has been working on getting approval for two loans—one for the Public-Private Partnership (PPP) program and the other for Climate and Disaster Resilience Enhancement Program (CDREP). While the conditions for the PPP loan have been met, there are still challenges in meeting the requirements for the CDREP loan.
