Signing Ceremony for ADB $500m COVID-19 Loan to Pakistan
ISLAMABAD, PAKISTAN (19 June 2020) — The Asian Development Bank (ADB) signed an agreement today for a $500 million loan with the Government of Pakistan, at a ceremony that also saw the World Bank and Asian Infrastructure Investment Bank (AIIB) each sign loan agreements with the government for the same amount, totalling $1.5 billion.
ADB’s loan was first approved on 10 June and is financed under the bank’s COVID-19 Active Response and Expenditure Support (CARES) program.
ADB Country Director Xiaohong Yang and Secretary, Ministry of Economic Affairs Division, Noor Ahmed signed the loan agreement. Prime Minister of Pakistan Imran Khan and the Minister for Economic Affairs Makhdum Kuhsro Bakhtyar witnessed the joint signing ceremony.
ADB’s CARES program will help the Government of Pakistan deliver social protection programs to the poor and vulnerable, expand health sector capabilities, and deliver a pro-poor fiscal stimulus to boost growth and create jobs as the country fights COVID-19. The CARES program is facilitated by parallel financing of $500 million from AIIB and another $500 million from the World Bank to support Pakistan.
“The ADB assistance signed today will provide essential budget support to Pakistan as it continues to improve its health sector capacity and strengthen its social safety net to negate the effects of this destructive disease,” said Ms. Yang. “We are fully committed to supporting Pakistan and continue to work closely with the government to overcome the pandemic and mitigate its health, social and economic impact.”
COVID-19 hit Pakistan’s growth at a critical juncture in its macroeconomic recovery process. The pandemic is expected to lead to a sharp decline in growth, revenue collection, and significant job losses in Pakistan.
On 19 May, ADB approved a separate $300 million emergency assistance loan to strengthen Pakistan’s public health response to COVID-19 and help meet the basic needs of vulnerable and poor segments of society.
In April, ADB reallocated $30 million from the National Disaster Risk Management Project to support Pakistan’s pandemic response and the NDRMF Board of Directors allocated an additional $20 million from earned interest from the Endowment Fund capitalized under the project.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.