$2.203bn new loan agreements signed

ISLAMABAD: The government during the first quarter of fiscal year 2020-21 signed new loan agreements worth $2.203 billion with various development partners including Safe Authority and foreign commercial banks.

Out of total new agreements, $1.057 billion worth of financing agreements were signed with multilateral development partners, USD 1,000 million as safe deposits, USD 115 million with foreign commercial banks, and USD32 million with bilateral development partners.

This has been revealed in the Economic Affairs Ministry quarterly report released here on Tuesday.

Around USD 1,115 million worth of agreements, which constituted 50 percent of the total new commitments, were Safe deposits and commercial borrowing.

This high level of commercial financing was arranged to refinance maturing commercial debt and to repay deposit received from a friendly country.

After commercial banks and Safe Deposits, the World Bank emerged as the largest development partner in terms of new commitments of PEA (23 percent) followed by the Asian Development Bank (14 percent), Asian Infrastructure Investment Bank (11 percent), and Germany (two percent).

During the period, an amount of USD 2,171 million has been committed as budgetary support; of which $1,056 was committed by multilateral development partners as program financing. The remaining amount of USD 1,115 million was signed with foreign commercial banks and SAFE authority to repay deposit received from a friendly country.

The amount of USD 31.62 million was allocated for project financing.

The commitments are planned to be disbursed over the time span of five to six years. The government received $2.9 billion during July-September 2020 were mainly under the projects and programs loans/grants from multilateral, bilateral development partners and financial institutions.—TAHIR AMIN