Pakistan on Monday signed an agreement with the Asian Development Bank (ADB) worth $1.3 billion for budgetary support and reforms.
Economic Affairs Division Secretary Syed Pervaiz Abbas and ADB Country Director Xiahong Yang signed the accord during a ceremony where Economic Affairs Minister Hammad Azhar was also present, according to a press release.
The approval for the loan had come through last week.
Under the agreement, ADB has committed to providing $1 billion towards the Economic Stabilisation Programme which aims to improve exchange rate management, strengthen public financial management, restore allocative efficiency of scarce public resources and reduce the social impacts of macroeconomic stability measures, said the press release.
Out of the total $1.3 billion loan, $300 million have been set aside for reforming the energy sector and the Financial Stability Programme. This aims to address energy shortfalls as well as policy-related shortcomings in the country’s energy sector.
On the occasion, Azhar stated, “The policy-based loan will not only strengthen exchange reserves but will also provide fiscal space to the government for implementing its reforms agenda.”
“ADB is committed to widespread financing options to strengthen Pakistan’s economy and reduce the risk of external economic shocks,” said Yang.
She also reiterated the bank’s strong commitment to further strengthen and expand its partnership with Pakistan.