ISLAMABAD: Finance Minister Ishaq Dar on Wednesday announced that the Asian Infrastructure Investment Bank (AIIB) will extend $500 million in co-financing for development programs in Pakistan.
“These funds will be received by State Bank of Pakistan by November 2022,” Dar tweeted, as the cash-strapped country desperately seeks financial assistance to mitigate the effects of the floods.
Board of Asian Infrastructure Investment Bank (AIIB) has today approved USD 500 million as co-financing of Asian Development Bank (ADB) funded BRACE program for Pakistan.
— Ishaq Dar (@MIshaqDar50) November 9, 2022
These Funds will be received by State Bank of Pakistan within November 2022.
BRACE (Building Resilience with Active Countercyclical Expenditures Programme) is an Asian Development Bank (ADB) financing program to combat the social consequences of economic crises.
The funds will help boost the foreign exchange reserves held by the central bank, which were recorded at $8,912.9 million as of October 28 – providing just over a month’s worth of import cover.
Reserves are critical for the country during the current situation, where it has to import food items after devastating floods destroyed agricultural crops and caused more than $30 billion in losses.
In October, the Asian Development Bank (ADB) also pledged to help Pakistan provide social security, promote food security and create employment opportunities for its people amid devastating floods and global supply chain disruptions. Approved $1.5 billion in financing.
Loans under ADB’s BRACE program will help fund the government’s $2.3 billion countercyclical development spending program designed to cushion the impact 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 lender has confirmed that the country has fulfilled all conditions attached to the Resilient Enterprise for Sustainable Economy (RISE-II) programme.
The World Bank’s board of directors is expected to approve the $450 million loan in November.
