Pakistan seeks additional $1.5 to $2 billion for climate initiatives in IMF program

Pakistan is set to propose an increase in its Extended Fund Facility (EFF) program with the International Monetary Fund by incorporating $1.5 to $2 billion for climate finance. 

As per news reports, this proposal is aligned with the upcoming annual IMF/World Bank meeting in Washington DC.

The current $7 billion EFF program, with its initial tranche already disbursed by the IMF, could potentially expand to $8 to $9 billion if the augmentation is approved. 

The annual gathering of the IMF and World Bank, which is taking place from October 21 to 26, is expected to draw global leaders from various sectors to discuss pivotal financial and developmental issues.

Finance Minister Muhammad Aurangzeb, who reached Washington DC yesterday, mentioned the plan to discuss this augmentation. 

“We will introduce this topic for discussion, although it’s premature to specify the amount,” stated Aurangzeb during a pre-departure interview.

The discussion at the IMF/World Bank meeting will explore the use of the IMF’s Resilience and Sustainability Facility (RSF). This facility offers long-term, affordable financing to countries implementing reforms to mitigate balance of payments stability risks arising from climate change and pandemic responses.

The RSF aims to ensure longer-term balance of payments stability by addressing these extensive economic challenges. While immediate quantification of the impact is challenging, the IMF requires a comprehensive assessment of the long-term financial sustainability before approving any new or augmented RSF arrangement.