Islamabad: The World Bank has approved a hefty USD 12 billion funding facility, including USD 1 billion loan, to cash-strapped Pakistan to be disbursed in the next five years for supporting economic reforms in the country.
Pakistan would receive the USD 1 billion immediately for energy and revenue support during the current financial year, the rest of the USD 11 billion will be in the shape of project loans and budgetary support.
The Finance Ministry here said World Bank loans are purely concessionary in nature with repayment schedule spanning over a period of thirty years including five years grace period.
The interest rate will be nominal at the rate of 2 per cent per annum.
“It is expected that USD 1 billion will be transferred to Pakistan during the next week and it will increase Pakistan’s Forex Reserves substantially,” the Finance Ministry said.
The World Bank in a statement said it has approved a package of assistance worth USD 1 billion to support Pakistan’s economic reforms.
“The World Bank Group’s Board of Executive Directors also discussed the Group’s – including International Finance Corporation and Multilateral Investment Guarantee Agency – new Country Partnership Strategy (CPS) for Pakistan envisaging a notional financing envelope of USD 11 billion over the next five years (Fiscal Years 2015-19) for development in both public and private sectors,” the statement said.
“The government of Pakistan deserves appreciation for stabilising the economy, initiating reforms in the power sector as well as revenue mobilisation and drawing in the private sector for spurring growth,” Philippe H Le Houerou, Vice President of World Bank Group’s South Asia Region, said.
“Staying on the structural reform path is important for competitiveness of the economy, which in turn is essential for creating jobs and lifting millions out of poverty in Pakistan,” he said.