ISLAMABAD: Pakistan has not received $23 billion in loans and grant. Some dating back 15 years, including a $1.6 billion Kerry-Lugar Act award from the US.
Prime Minister Shehbaz Sharif and Finance Minister Ishaq Dar have been trying to raise $5 billion to $7 billion. This effort is to relaunch the IMF programme, but the monies, including grants worth $3.7 billion, remain unpaid.
The Ministry of Economic Affairs quarterly report released this week revealed project-wise specifics of the programmes and funding remained blocked.
The sources attributed such large unspent amounts to slow government approvals, loan negotiations, a lack of coordination between government agencies finalising procurement details, lengthy bidding processes, and a lack of capacity of the executing agencies in contract management and project monitoring.
Each scenario involves incompetent officials handling the projects and insufficient central follow-ups. Official documents showed that international creditors and donors had loaned Pakistan, but their disbursements are still pending. The country pays commitment charges on a portion of the idle money.
As both sides cannot agree, the IMF has not released $2.6 billion of the $6.5 billion bailout package. The IMF extended the $6 billion loan agreement for nine months with $500 million in additional financing after initially giving it until September 2022.
Nevertheless, the Pakistan Democratic Movement-led administration did not follow the revised schedule agreed with the global lender in August last year.
The 9th review is still pending. .
Dar and SBP Governor Jameel Ahmad again failed to set a date for staff-level agreement this week.
Loans Non-disbursement
Pakistan is desperately seeking international commercial loans, but the official report raises concerns about their non-disbursement. According to the ministry’s assessment, a $440 million foreign commercial loan from the Suisse AG-led consortium has not been disbursed despite a 2017–2022 closing deadline.
The $1.6 billion Kerry Lugar Act award to the then-civilian government has not been disbursed. Rural development, social protection, democracy, energy, municipal services, and road infrastructure projects received funds.
36 of the 42 incomplete initiatives have lapsed, suggesting their development goals were not met.
Despite all initiatives having completed years earlier, the $535 million UK funding remained unpaid. 2007.
Pakistan declined World Bank funds to reduce energy industry losses.
Some funds for the Karachi Port Improvement project are still pending. The $157 million Dasu Hydropower project, started in 2014, should have been completed by August 2022, however the Water and Power Development Authority is inefficient (WAPDA).
As of the first quarter of the current fiscal year, $4.8 billion in ADB-funded project disbursements remain outstanding. ADB projects from 2006-07 have likewise fulfilled their gestation periods.
China has not disbursed $1.4 billion in loans, including $345 million for the Karachi Nuclear Power Stations, whose financial closing date expired last June.
Pakistan failed to prove progress on three water sector projects, therefore the European Investments Bank has not disbursed $244 million.
The country has not used the $554 million EU funding, and all EU-funded projects have passed their financial closure dates. Rural, education, and health projects received EU grants. . According to the ministry, Japan has not disbursed $321 million in loans and grants to projects, many of which have lapsed.
Saudi Arabia has not disbursed $743 million for 18 projects, 17 of which have ended.
