$205 Million Program to Help Improve Social Services in Balochistan, Pakistan
MANILA, PHILIPPINES - ADB is providing a US$205 million loan and grant package to help increase access to quality social services in Balochistan, Pakistan.
The program will support policy reforms to address long-standing issues in education, health, and water supply and sanitation. It will also help the province's local governments fulfill their devolved roles and responsibilities in social service delivery.
The program aims to improve access to and quality of social services, and will empower citizens and enable the private sector to play a greater role in social service delivery.
The Government recently embarked on a major decentralization effort, which includes the devolution of social service management to local governments. This presents an opportunity to improve social service delivery by improving Balochistan's capacity to increase its expenditures in this sector.
"Human capital must rapidly improve for Balochistan to benefit from the buoyant economic growth witnessed in the past few years in
"Balochistan needs to bring in governance reforms and strengthen institutions in the social sector to improve the effectiveness of public and private social service delivery."
A $130 million loan from ADB's ordinary capital resources (OCR) will finance policy reforms to improve the funding, management, and quality of social services; the managerial power of local governments; and the involvement of citizens and the private sector in social service delivery.
A $65 million loan from ADB's concessional Asian Development Fund (ADF) will help increase funding for social services by providing performance grants to eligible district and municipal governments. These grants target priority investments and are designed to enable local governments to identify service gaps and flexibly respond to local needs.
An additional $5 million technical assistance (TA) loan from the ADF will support the program's implementation, as well as help develop governance in the social services and strengthen sector management.
Another $5 million grant from the ADF will specifically help address the province's public health challenges, such as the high morbidity and mortality from malaria and tuberculosis, preventing the spread of HIV/AIDS, and reducing vaccine-preventable diseases among children.
The program is ADB's first for the social sectors in Balochistan, and follows loans that strengthened the province's local governments and resource management.
The OCR loan carries a 15-year term, including a grace period of 3 years, and an interest rate determined in accordance with ADB's LIBOR-based lending facility. The $65 million ADF loan carries a 24-year term, while the $5 million TA loan from the ADF carries a 32-year term. Both include a grace period of 8 years and carry interest rate charges of 1% per annum during the grace period and 1.5% thereafter.
The government of Balochistan will contribute $1.25 million equivalent toward the total cost of the TA project.
The Balochistan Planning and Development Department is the executing agency for the program, which will be carried out up to about June 2009, and the TA project, due for completion in December 2010.
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