Ishaq Dar, the finance minister of Pakistan, revealed on Wednesday that roughly 90% of the donations from the international community made during a donors’ conference in Geneva for flood-devastated Pakistan were project loans that will be repaid over the ensuing three years.
Pakistan was promised by the international community earlier this week that it would receive more than $10 billion to help it recover from last year’s catastrophic floods. Nearly 40 countries were represented at the summit, which was co-hosted by Islamabad and the UN, along with private donors and international financial institutions.
During a press conference today with Prime Minister Shehbaz Sharif and other federal cabinet members, Dar disclosed that $8.7 billion of the commitments were loans. He kept quiet about the conditions of these loans. The prime minister did, however, add, “We expect the terms to be lenient.”
Dar stated that the World Bank, the Islamic Development Bank, the Asian Development Bank, and the Asian Infrastructure Investment Bank had agreements that made it possible to finance $8 billion in project loans.
“I purposely did not include the Saudi Development Bank’s pledge because it is not clear from their statement of $1 billion whether it corresponds to programmed lending or project loan,” Dar continued.
When asked when he anticipated that these pledges would actually translate into inflows, the premier responded, “That depends on us.”
The more quickly we can develop and make possibilities, and thus impress them [donors], the faster these commitments will come to pass.
The SBP reserves are currently at about $4.5 billion, or roughly less than four weeks’ worth of imports, after recent loan payments to two UAE-based banks. This indicates that the nation requires financial assistance immediately. Unless Islamabad mends its frayed relations with the IMF, that is unlikely to occur along with the multilateral lenders’ guarantees for flood relief.
The government’s ability to meet the revenue goals previously set for the current fiscal year was a major topic of discussion regarding the already postponed ninth review for the release of $1.2 billion, according to information provided by the finance minister about a meeting he had with the International Monetary Fund (IMF) team outside of the Geneva meeting.