AIIB to extend $500m for development programme: Finance Minister Dar

• $500m to be released to SBP in Nov.
• Funds to be spent on uplift projects.
• Loan part to ADB's financing.

ISLAMABAD: Finance Minister Ishaq Dar on Wednesday announced the Asian Infrastructure Investment Bank (AIIB) would extend $500 million as co-financing for a development programme in Pakistan.

“These funds will be received by the State Bank of Pakistan within November 2022,” Dar tweeted, as the cash-strapped nation desperately seeks financing to cushion the impact of floods.

The BRACE (Building Resilience with Active Counteryclical Expenditures Programme) is an Asian Development Bank (ADB) financing programme to counter the social fallouts of economic crisis.

The funds would help shore up forex reserves held by the central bank, which were recorded at $8,912.9 million as of October 28 — providing an import cover of just over a month.

The reserves are crucial for the country amid the current situation, where it has to also import edibles after the cataclysmic floods devastated the agricultural crops and dealt damages estimated at over $30 billion.

In October, The Asian Development Bank (ADB) also approved $1.5 billion in financing to help Pakistan provide social protection, promote food security, and support employment for its people amid devastating floods and global supply chain disruptions.

The loan, provided under ADB’s BRACE programme, will help fund the government’s $2.3 billion countercyclical development expenditure programme designed to cushion the impacts of external shocks, including the Russian invasion of Ukraine.

Pakistan is also likely to receive a $450 million loan from the World Bank as the international creditor confirmed that the country had accomplished all conditions attached to the Resilient Institution for Sustainable Economy (RISE-II) programme. 

The board of directors of the World Bank is expected to approve the $450 million loan in November.