ISLAMABAD: The government failed to avail the concessionary financing window of the World Bank and was beneficiary of over half of its estimated cheaper loans of $1 billion in the just-concluded FY18.
Rs520.6 million were released to Pakistan during FY18 by the International Development Association (IDA), the Washington-based lender’s concessionary loan arm, according to figures compiled by Economic Affairs Division (EAD), reported Express Tribune.
This amount was 54 percent of the authority’s projection of $968 million. Funds released by the International Bank for Reconstruction and Development (IBRD) amounted to $249 million against a budgeted forecast of $68 million.
However, Pakistan opted to avail expensive financing from foreign commercial banks to cover its current account deficit instead of utilizing these cheap sources of financing.
The country received $3.7 billion in loans from overseas commercial banks against a budgeted forecast of $1.5 billion. The loans were obtained from foreign commercial banks for a max duration of three years at an interest rate of LIBOR plus 3 percent.
The authorities for FY18 projected Pakistan would receive $1.03 billion loans from global lending institutions which included concessionary loans of $968 million and commercial loans of $68 million.
Nevertheless, the real disbursements amounted to 3/4th of these projections, despite a few projects receiving more than forecasted financing.
However, a major issue has been of payment of commitment charges on unreleased but approved loan amount for Pakistan.
And projects in all sectors have been impacted by delays because of administrative hold-ups and delays in giving contracts.
Also, lenders were taking more than the stipulated period in investigating and finalizing contractual documents.
Punjab and Sindh have been amongst the major beneficiaries of the World Bank-funded projects and some are managed by the federal government.
From the $249 million funds released by IBRD, Punjab was the beneficiary of $141 million for four projects.
And a break-up of this amount released by WB reveals $62.4 million was released for education sector reforms in Punjab, $20 million for jobs and competitiveness project, $43.7 million for agriculture transformation project and $14.8 for an irrigation project.
An amount of $132.2 million was released for Tarbela’s fourth extension scheme. A lot of social-sector schemes funded by the IDA were allocated lesser sums in FY18.
Around 40 percent of the IDA’s funding or $213 million were allocated to three projects. The Pakistan financial inclusion and infrastructure project was allocated $75.2 million, housing finance project $58 million and $80 million was released for public finance management and support project.
A meagre amount of $1.8 million was reserved for the tertiary education project, Sindh skills development project was allocated $1.63 million, Punjab health sector reforms project $15.4 million, Punjab public management project $8 million, national immunization support project $4.7 million and Punjab skills development scheme $6.2 million.
