ECC approves Rs4.98bn for implementation of interest free loan programme

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved Rs4.98 billion in favour of Pakistan Poverty Alleviation Fund (PPAF) for the financial year 2020-21 (FY21).

Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh chaired the meeting of the ECC at the Cabinet Division.

“The chair approved the allocation of funds for implementation of the Interest Free Loan (IFL) programme by PPAF. The Benazir Income Support Programme (BISP) surrendered Rs4.98 billion in favour of PPAF for FY21, which shall be used for the purpose of the IFL programme,” according to a statement issued by the Finance Division on Wednesday.

The ECC also allocated Rs10 billion from stimulus package for the payment of 1st installment of interest/profit (for the period of 21st May till 20th Nov 2020) in respect of Pakistan Energy Sukuk-II (amounting Rs200 billion).

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On a summary moved by the Ministry of Information and Broadcasting for allocation of additional funds for the payment of media campaigns launched on 5th August (Kashmir Siege Day), the ECC decided that the Ministry of Information and Broadcasting may meet the immediate fund requirement through re-appropriation from its budget allocated for the FY21 and any shortfall due to re-appropriation of the funds would be met through technical supplementary grant towards the end of the current financial year.

Meanwhile, the Ministry of Energy requested ECC to issue directions for the settlement of a loan of about Rs7.6 billion and its associated costs from National Bank of Pakistan (NBP) in relation to advance payment for Karkey Karadeniz Elektrik Uretim (KARKEY).

The committee decided that the Finance Division should engage with the NBP for the settlement of the loan. It also called for a well-rounded proposal, with all stakeholders on board, be presented before the ECC for final approval.

Moreover, the committee approved in-principle a technical supplementary grant amounting to Rs72.635 billion to Power Holding Limited (PHL) for onward disbursements to respective banks (or through financial instruments as and when due) during the current financial year. In an earlier decision, the ECC had decided to shift the power sector debt stock of Rs804 billion to public debt.

As per debt repayment schedule agreed between PHL and lending institutions, an amount of Rs72.635 billion was required to be paid partially during the FY20 and remaining is payable in FY21 as principal repayments to lenders. Furthermore, the loan amounting to Rs82 billion taken from OGDCL and included in the total of Rs804 billion is required to be considered separately through non-cash/cash settlements.

The ECC also formed a committee, to be headed by Adviser to the PM on Institutional Reforms and Austerity Dr Ishrat Hussain, to prepare a proposal for the settlement of dues of power sector and other related issues in a holistic manner for onward submission to the committee.

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