ADB okays $250m for infrastructure

Source: Dawn

ISLAMABAD: The Asian Development Bank (ADB) on Wednesday announced that it had approved a $250 million policy-based loan to Pakistan to drive sustainable investments in infrastructure and services through public-private partnerships (PPPs).

"This programme is part of our comprehensive and integrated package of public sector management support that balances the country's fiscal consolidation and growth objectives," said ADB Director General for Central and West Asia Yevgeniy Zhukov.

"The programme will help the Government of Pakistan create an environment conducive to strategic, fiscally affordable PPPs that will bring the country closer to its development goals", he added.

The announcement said the ADB's loan-supported reforms would increase the absorptive capacity of PPP infrastructure investments by creating a more robust and integrated legal and institutional framework for public investment management and public financial management for PPPs by implementing an integrated PPP policy.

The reforms will facilitate efficient infrastructure planning and promote sustainable development practices in infrastructure projects, such as climate risk screening and gender considerations in project feasibility assessments and PPP contracts.

The plan has four operational priorities, including addressing poverty and inequalities, promoting gender equality, tackling climate change by building climate and disaster resilience and environmental sustainability, and strengthening governance and institutional capacity.

"Mobilising private finance through PPPs can help to bridge the financing gap in public sector infrastructure projects -- which is vital," said ADB Economist Sana Masood.

"This programme will help ensure PPPs in Pakistan are structured correctly and implemented to deliver more efficiency, innovation, and value for money," she said.

A $700,000 technical assistance grant funds the programme's preparation and implementation. In December 2023, ADB approved an additional $950,000 to support PPP pipeline identification, capacity building, and sector strategy development.

The programme's core objective is to strengthen the governance framework and enable an environment for public-private partnerships (PPPs) at the federal government level by strengthening policy, legal, and institutional frameworks for public investment management and public financial management in connection with PPPs, national and sectoral infrastructure planning, and PPP project preparation.