ADB, Pakistan finalise USD 305 million emergency COVID-19 loan
Islamabad: The ADB and cash-strapped Pakistan have finalised a USD 305 million emergency COVID-19 loan to help the country buy medical equipment and disburse money to poor women, according to a media report on Wednesday.
The Asian Development Bank will extend the loan on commercial terms, The Express Tribune reported.
Last month, Pakistan had received an emergency loan of USD 1.39 billion from the International Monetary Fund (IMF) and an aid of USD 200 million from the World Bank (WB).
While the IMF loan was to boost Pakistan’s foreign exchange reserves in the wake of the coronavirus crisis, the WB aid focused on supporting preparedness and emergency response in the health sector.
Explaining the need for the ADB loan, Pakistan’s Planning Commission Deputy Chairman Jahanzeb Khan told The Express Tribune that the government was looking at ways to assist those who were directly hit by the virus but could not till now apply for financial help. Pakistan had sent the official loan request to the ADB in March.
The USD 305 million package will be combined under the Pakistan National Emergency Preparedness and Response Plan (NEPRP) for COVID-19 which is under the Planning Commission.
The NEPRP is worth USD 588 million, which includes a USD 238 million World Bank loan.
Out of the USD 305 million loan, USD 200 million is for social protection for vulnerable sections — cash transfers and unconditional cash transfer instalments — and USD 105 million for health emergencies like maintaining stores.
The novel coronavirus which first surfaced in China’s Wuhan city has claimed over 250,000 lives and infected 3.6 million people across the world.
In Pakistan, the virus has killed 526 people with 22,413 confirmed infections.
The virus has also adversely hit the country’s economy. On Tuesday, Pakistan requested the members of G-20 nations for debt relief with a commitment of not contracting new non-concessional loans except those allowed under the IMF and World Bank guidelines.
The country’s foreign currency reserves had dropped to a four-month low at USD 10.97 billion on April 10, 2020.
The reserves had partly depleted due to capital pullout worth around USD 2.69 billion by short-term foreign investors from Pakistan’s debt market over the past five to six weeks.