TAHIR AMIN

ISLAMABAD: The World Bank has approved restructuring of ‘Punjab Resource Improvement and Digital Effectiveness (PRIDE)’ project of USD 304 million while allowing cancellation of USD18 million portion of loan, as well as, extending loan closing date to allow for the completion of critical activities.

Official documents revealed that this restructuring constitutes a Level 2 modification of PRIDE programme, which is financed through a USD304 million loan from the WB for Reconstruction and Development (IBRD). It represents the first restructuring of the Programme and has been initiated to extend the programme’s closing date and cancel a portion of the allocated funds.

The PRIDE Programme, approved in December 2020 and effective from January 2021, aims to increase Punjab’s revenue, improve fiscal management, and enhance digital public services. This is the second restructuring of the PRIDE project, undertaken to extend its closing deadline and cancel a portion of the allocated funds. The Economic Affairs Division (EAD) submitted a request July 22, 2025, to extend the project’s closing date by ten months, to the new date of June 30, 2026.

In response, the World Bank approved a programme extension, enabling the Finance Department to complete remaining activities. The programme remains fully aligned with the objectives of the Country Partnership Framework (CPF), particularly Outcome 5, which emphasises expanding fiscal space and enhancing the efficiency and progressiveness of public spending for development.

On February 7, 2025, the government of Punjab requested the cancellation of USD18 million under the Investment Project Financing (IPF) component. The programme’s steering committee approved this request along with a proposed one-year extension of the closing date to allow for the completion of remaining activities.

However, the formal submission of the extension requests to the World Bank—via the Economic Affairs Division (EAD)—was delayed. Eventually, on July 22, 2025, the government of Pakistan requested a 10-month extension, moving the closing date from August 31, 2025, to June 30, 2026. In response, the proposed restructuring will accommodate this extension to ensure completion of pending activities.

The extension aims to consolidate the results already achieved and provide sufficient time for the efficient completion of remaining activities, thereby ensuring a smooth Program closure. This adjustment will also enable optimal utilization of the remaining funds and safeguard the sustainability of programme outcomes.

The restructuring is underpinned by several key considerations: The depreciation of the Pakistani Rupee has significantly affected financial projections, requiring a reassessment of budget allocations to preserve fiscal balance and program effectiveness.

Certain activities expected to be financed under the Program have become redundant due to overlapping provincial initiatives and the rollout of federal systems. For example, the government of Punjab saved substantial sums by adopting the federal government e-procurement system instead of developing a new one.

This has created opportunities to reallocate resources to areas with greater impact. Critical initiatives such as business process reengineering and the development of a disaster risk financing strategy require additional time for effective completion, justifying the extension.

The proposed changes to the PRIDE programme include: i., cancellation of USD 18 million under the IPF component due to redundancy and coverage by Punjab’s own programs. ii., Extension of Loan Closing Date: The closing date for the loan is proposed to be extended from August 25, 2025, to June 30, 2026, to allow for the completion of critical activities. iii., Implementation Schedule Adjustments: Changes in the implementation schedule to accommodate the extended timelines required to complete certain activities including the development of a risk financing framework and the completion of business process re-engineering for revenue departments and district treasuries.

The cancellation of funds under the IPF component will not affect any Program activities related to the achievement of the Disbursement-Linked Indicators (DLIs). The primary areas impacted by the cancellations are consultancy contracts (37 percent) and procurement of goods (35 percent).

All necessary consultancy services have already been secured; however, significant savings have been realised due to the depreciation of the rupee and elimination of certain TA activities due to shifting priorities.