ISLAMABAD: The Asian Development Bank has approved $600 million loan package for Pakistan.
Under the latest programme, the ADB will disburse the first subprogram of $300 million in a couple of days, according to a handout issued by the Manila-based lending agency after the meeting of its board. The second tranche will be disbursed next year.
The $600 million, the ADP said, would help Pakistan roll out major structural reforms to improve the performance and financial sustainability of its public sector enterprises. The loan will be utilised in financing the budget instead of creating any asset.
Of the $300 million, an amount of $100 million has been borrowed at an interest rate of 2% per annum for a period of 25 years. The remaining $200 million has been obtained at an interest rate equivalent to London Inter-bank Offered Rate plus 0.5% for a period of 15 years.
In the past three years, there has been a drastic shift from getting projects loans used for asset building towards policy loans meant for budget financing. The government and the ADB showed an unusual haste on Tuesday and signed the agreement for the initial $300 million tranche within hours of its approval from the ADB board.
