ADB approves $659m project funding

ISLAMABAD: The Asian Development Bank (ADB) on Wednesday said it had approved $659 million for three separate projects to be implemented by the federal government, Sindh and Khyber Pakhtunkhwa provinces for more inclusive and sustainable growth and development.

In a statement, the Manila-based lending agency said the projects will focus on improving domestic resource mobilisation, rehabilitating schools damaged by the devastating August 2022 floods and enhancing agricultural productivity to improve food security.

“This significant new wave of financing will help Pakistan recover from the impacts of last year’s cost-of-living crisis and super-floods and return to the path of long-term development that is sustainable and inclusive,” said ADB Director General for Central and West Asia Yevgeniy Zhukov.

“This multifaceted approach is part of ADB’s strategic engagement in Pakistan and cohesively deploys our programme lending and project investments to enhance support for Pakistan’s efforts to improve its economic situation and enhance the quality of life for its people.”

The first $300 million loan would be utilised by the federal government for the “Improved Resource Mobilisation and Utilisation Reform Programme”. This will support the government to realise its ambition of achieving economic growth that is sustainable, broad-based, and inclusive.

The $300m policy-based loan will support the initiative’s first sub-programme, which focuses on laying the foundation for reforms to policies, laws, and institutional capacity that will improve domestic resource mobilisation and utilisation. The programme aims to transform tax administration, public expenditure management, and other institutional structures to strengthen resource mobilisation including non-debt resources such as private investment and savings.

The programme is expected to ensure fiscal sustainability and generate fiscal space to finance critical investments in human capital, infrastructure and poverty alleviation. The proposed programme will support policy, legal, and institutional actions in three key reform areas that will help improve, domestic revenue mobilisation, the quality of public expenditure through better cash management and the mobilisation and utilisation of domestic savings and foreign direct investment (FDI).

It is part of ADB’s medium-term (2021-25) country partnership strategy for Pakistan. It will help the Ministry of Finance and the Federal Board of Revenue in the implementation of critical tax administration, pension system, and institutional and capacity development reforms in Pakistan.

The second $275m in additional emergency loan is meant for the ongoing Sindh Secondary Education Improvement Project and it is part of ADB’s $1.5 billion pledge of support for Pakistan’s recovery from the devastating 2022 floods. The additional financing will help reconstruct up to 1,600 flood-damaged schools using disaster- and climate-resilient and gender-responsive designs.

This is aimed at boosting resilience and inclusivity in the education system in Pakistan, helping the recovery of learning and earning losses especially for girls in the most disadvantaged and vulnerable districts of Sindh. An $800,000 technical assistance grant will be provided to help plan and monitor the status of reconstruction in all flood-damaged schools and provide implementation support, including for introducing inclusive design features.

The third $80m concessional loan for the Food Security Support Project in Khyber Pakhtunkhwa is also part of ADB’s $1.5bn pledge of support for Pakistan’s recovery from the 2022 floods. The project is meant to help address climate vulnerabilities, enhance food security, and boost the livelihoods of rural farm households in the most flood-damaged districts in the province.

The project is expected to provide essential agriculture inputs and training to smallholder farmers, including women, and improve household nutrition and women’s empowerment. It will also enhance digital access and availability, especially about market opportunities and climate information.

ADB will administer a $3m grant for the project from the Japan Fund for Prosperous and Resilient Asia and the Pacific that will finance activities for women farmers related to seed cleaning and the safer handling of agrochemicals.