$21 billion worth of foreign aid yet to be received by Pakistan

ISLAMABAD: Pakistan is yet to receive $21.6 billion in promised foreign aid in the form of economic assistance due to long completion projects, data from the Ministry of Economic Affairs showed. 

A report published in The Express Tribune claimed that out of the $21.6 billion, there was $3.9 billion worth of foreign grants that the international donors committed to giving to Pakistan but remained undisbursed due to multiple reasons.

The remaining $17.7 billion were relatively cheap loans that Pakistan contracted at 1.25% to around a 3% interest rate, claimed the report.

Official data of the economic affairs ministry showed that the undisbursed balance of foreign loans and grants stood at $21.6 billion as of June 2019. There was a reduction of $2 billion or 8.6% as compared to the preceding year when the amount stood at $23.6 billion.

The report also mentions that some of these loans have not been disbursed due to the long conceivement period of different projects. For instance, $3.4 billion was outstanding against the Karachi nuclear power projects, which took a long time for completion.

However, billions of dollars committed by the World Bank (WB) and the Asian Development Bank remained stuck due to public-sector inefficiencies.

WB disbursed $653 million against the total commitment of $3.9 billion. After signing new contracts, the total outstanding undisbursed amount stood at $4.23 billion, claimed the report.

The borrowing cost of $21.6 billion is in the range of 1.25% to 3% and loans will be returned in 19 to 30 years.