ZAHEER ABBASI
ISLAMABAD: The government has injected Rs 64 billion into Pakistan Development Fund Limited (PDFL), previously known as Infrastructure Project Financing Facility, in 2016-17 for acquiring shares of the government-owned companies.
The amount was transferred to the PDFL from $ 1.5 billion grant provided by Saudi Arabia in 2013-14, according to the Finance Ministry brief presented to the Senate Standing Committee on Finance on Thursday last. The Finance Division stated that the government received a grant of $ 1.5 billion from a friendly country (Saudi Arabia) in two tranches of $750 million each.
The purpose of the grant was to undertake development activities in the country, particularly in energy related projects. The standard mechanism for utilizing such grants is that the State Bank of Pakistan, upon receipt of foreign grant, shifts equivalent amount of local currency (rupees) to the government’s account, central account # 1.
In 2014 the federal government formed a company registered with Securities and Exchange Commission of Pakistan (SECP) namely Pakistan Development Fund Limited (PDFL). The aim was that the company would be the main recipient of the grant and it would be used as a vehicle for enhancing development activities in infrastructure and power sectors in the country.
Subsequently, in June 2014, the government transferred the amount to the account of PDFL through a letter of Finance Division. According to Finance Division letter, dated June 27, 2017, the Accountant General of Pakistan (AGPR) was conveyed the sanction of the President of Pakistan for release of Rs 157.198 billion to the PDFL, (formerly Infrastructure Project Financing Facility) for providing complementary long-term project finance to Public Private Partnership (PPP) projects to encourage private sector participation.
The AGRP was requested that necessary sealed authority may please be issued immediately to the State Bank of Pakistan (SBP), under intimation to this Division for placing the funds of Rs 157. 198 billion in the account titled PDFL in SBP, Karachi. The expenditure involved is debit-able to head account one.
In the financial year 2016-17, PDFL acquired the shares of the government-owned companies for which it transferred Rs 64 billion to the government.
