IBRD assures funding won’t discontinue for ongoing projects

Islamabad: International Bank for Reconstruction and Development (IBRD), an arm of the World Bank (WB) has reassured that it won’t be dropping financial support to Pakistan for ongoing projects even if it does not meet the stipulated guidelines.

According to a WB spokesman in Islamabad, Pakistan is in the category of a blend country and qualifies for both IBRD and International Development Association (IDA). He said in case a country’s status is downgraded, the projects being aided financially remain un-impacted.

He reiterated that budgetary support to any country is related to its continuation of macro-economic policies as laid down by the World Bank, with evaluation and inputs being carried out by the International Monetary Fund (IMF).

A Country Partnership Strategy (CPS) had been endorsed by the World Bank for Pakistan for the period of 2015-19. The purpose of this scheme is to ensure that countries are able to carry out the most difficult reforms in areas that can help in improving prosperity and decreasing poverty.

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Under this partnership, over Rs11b are expected to be disbursed which includes IBA lending of around $1.1b annually dependent on exchange rate. Funding from the IBRD as per CPS regulations would need robust maco-economic balances and forex reserves equaling to 21.5 months imports of goods and services alongside a fall in public debt to GDP ratio.

Funding from IBRD is said to be restricted to $500m annually and a max capped investment ceiling of Rs2b during the CPS period. The further lending would be dependent on improvement of Pakistan’s creditworthiness and IBRD’s lending capability.

If the CPS is successful, the WB could permit more lending from IBRD which is subject to reforms being met and the donor agency may reconsider not to continue its Development Policy Financing if adherence to the set guidelines isn’t met.

 

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