Policy-based loan agreement worth USD 250 million signed with ADB

ISLAMABAD: The Asian Development Bank (ADB) and the Government of Pakistan on Friday signed a policy-based loan agreement of USD 250 million to help Pakistan drive sustainable investments in infrastructure and services through public-private partnerships (PPPs).

ADB Country Director Yong Ye and EAD Secretary Kazim Niaz signed the agreement.

Yong Ye emphasized the importance of an enabling environment to support strategic and budget-friendly PPPs in Pakistan.

The main objective of the program is to strengthen the governance framework and enabling environment for public-private partnerships (PPPs) at the federal government level by strengthening: (i) the policy, legal and institutional framework for public investment management (PIM) and public finance management (PFM) in case of PPP; and (ii) national and sectoral infrastructure planning and preparation of PPP projects.

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Dr. Kazim Niaz thanked ADB for its continued support to Pakistan’s critical development needs and reconstruction efforts in the post-flood context. Program loans support the government’s balance of payments (BOP) reform program and contribute to the country’s macroeconomic stability.

Dr. Kazim Niaz stated that the program will largely contribute to the implementation of the Prime Minister’s vision of greater involvement of the private sector in the development process.

The ADB on June 5 approved a loan of $250 million to Pakistan.

ADB’s Program to Promote Sustainable Public-Private Partnerships supports the implementation of government policies aimed at creating an enabling environment for affordable PPPs and promoting inclusive economic growth.

The ADB program supports reforms that will increase the absorption capacity of PPP infrastructure investments by creating a more robust and integrated legal and institutional framework for public investment management and public financial management in PPPs.

The program supports the implementation of an integrated PPP policy. The reforms will facilitate effective infrastructure planning and promote sustainable development practices in infrastructure projects, such as climate risk monitoring and gender mainstreaming in project feasibility assessments and PPP contracts.

The preparation and implementation of the program is funded by a $700,000 technical assistance grant. In December 2023, ADB approved an additional $950,000 to support PPP pipeline identification, capacity building and sector strategy development.