FinMin Aurangzeb reaffirms commitment to first Panda Bond in talks with IFIs

• Finance minister acknowledges IsDB's role as reliable partner.
• He provides overview of improvement in economic outlook.
• Aurangzeb appreciates WB is considering a grant facility.

ISLAMABAD: Finance Minister Senator Muhammad Aurangzeb on Thursday engaged with leaders from many international finance institutions (IFIs) in Washington, doubling down on Pakistan's commitment to entering global capital markets by issuing its first Panda Bond.

The discussions were held on the sidelines of the World Bank-IMF Annual Meetings. Aurangzeb is leading a Pakistan delegation to the event underway in the US capital from October 21 to 26.

Other delegates accompanying him include Finance Secretary Imdad Ullah Bosal, Secretary of Economic Affairs Dr Kazim Niaz, and State Bank of Pakistan (SBP) Governor Jameel Ahmad.

In his meeting with Islamic Development Bank (IsDB) President Dr Muhammad Sulaiman Al Jasser, the finance minister acknowledged the bank’s role as a reliable partner in Pakistan’s progress and appreciated its financing in diverse sectors such as energy, transportation, education, and health.

He especially talked about the visit of Saudi Minister for Investment Khalid A Al-Falih to Pakistan for business-to-business engagements with the private sector.

The minister lauded the IsDB’s investment in Mohmand dam along with other members of the Arab Coordination Group which, he said, "could serve as the template for co-financing of similar and even bigger projects in the future".

Separately, the finance czar met with the representatives of JP Morgan Bank and provided an overview of the improvement in Pakistan’s economic outlook on the back of the recently concluded SBA.

Aurangzeb underlined the criticality of the Extended Fund Facility (EFF) to lending permanence to macroeconomic stability and executing the structural reforms. He also highlighted important reforms in the areas of taxation, privatisation, and overhauling of state-owned enterprises (SOEs).

He expressed the resolve to tap into International Capital Markets (ICM) through the issuance of the inaugural Panda Bond.

In the meeting with World Bank Managing Director of Operations Ms Anna Bjerde, the finance minister discussed Pakistan’s development priorities supported by the Country Partnership Framework (CPF).

He also briefed the MD about the Joint Domestic Resource Mobilisation Initiative (JDRMI) being launched with the support of the World Bank and IMF. 

"We welcome the decision of the Board not to levy any commitment fee for four years for Program-for-Results Financing (PforR) and Investment Project Financing (IPF) instruments," he said.

Aurangzeb appreciated that the bank was considering a grant facility for project preparation and noted with satisfaction that IDA replenishment was proceeding satisfactorily.

While appreciating the recent improvements in the disbursements, the forum agreed that efforts would continue to sustain the continued improvements.

Moreover, the Pakistani dignitary requested to organise capacity-building workshops for implementing agencies as well, in the quest to ensure better project preparation that will lead to improved implementation.

In a meeting with the leadership of Mashreq Bank, the minister expressed satisfaction that the bank was expanding its operations in Pakistan and would launch a new office soon. He hoped that approval of its digital banking license would be processed soon.

Meanwhile, the finance minister held a meeting with Ms. Anneliese Dodds, Minister of State for Development, Women and Equalities of the United Kingdom.

He appreciated the long-lasting partnership between the two countries in the development sector and welcomed the contribution of $120 million to IFC’s Climate Investment Funds for Pakistan.

He informed that the State Bank of Pakistan had cleared the backlog of all cases of repatriation of profits and dividends. He also invited the UK companies to invest in the agriculture, IT, mines, and minerals sectors, to avail the opportunities that are emerging because of the improved investment climate.

Furthermore, the finance czar participated in the Small Talks Forum hosted by the Bank of America (BofA) Securities, where he provided a comprehensive picture of the government’s macroeconomic stabilisation efforts and the performance of the economy over the last year.

He affirmed that the government was committed to all reforms under the EFF including in taxation, energy, privatisation, and SOEs. He informed that reforms were underway in the FBR in all three areas of people, process, and technology.

The minister resolved that the government would tap into international capital markets in due course. He invited partnerships in Pakistan’s agriculture, IT, mining, and renewable energy sectors as well.