World Bank sets tough loan terms for USD 1.5 billion to Pakistan
Apr 19, 2021
Islamabad [Pakistan], April 20 : As Pakistan's financial debt continues to mount, the World Bank has set tough conditions for USD 1.5 billion lending such as an increase in electricity rates, introduction of new power and tax policies, putting the Imran Khan-led government in a tight spot that is already seeking a review of the International Monetary Fund (IMF) deal.
Citing sources, The Express Trtibune reported that the country's finance ministry was seeking three budget support loans totalling USD 1.5 billion from the World Bank before the end of June.
The loans are part of the overall USD 27 billion external financing requirement for the current fiscal year, according to the sources.
Pakistan has requested the World Bank to provide USD 500 million each under the Resilient Institutions for Sustainable Economy (RISE-II), Securing Human Investments to Foster Transformation (SHIFT-II) and Programme for Affordable and Clean Energy (PACE), as per sources.
Outgoing Finance Minister Hammad Azhar had on Friday chaired a meeting to review the status of conditions that the World Bank had proposed for giving the loans. In the absence of non-debt creating inflows, the government's reliance on foreign loans is deepening and it has recently borrowed USD 2.5 billion by floating Eurobonds, reported The Express Tribune.
Some of the conditions that the World Bank has set are also part of the IMF program, which the IMF Fund revived three weeks ago, but the government now wants to renegotiate it.
According to The Express Tribune, newly appointed Finance Minister Shaukat Tarin has publicly stated that he would like to renegotiate the IMF deal.
