Pakistan and the Asian Development Bank (ADB) have concluded arrangements for an emergency loan of $305 million to purchase health equipment and disburse cash assistance to vulnerable women to cope with the coronavirus (Covid-19) pandemic health and economic crises.
Unlike the initial suggestion of giving the loan at concessional rates, the multilateral agency based in Manila will be lending the money on commercial terms.
The loan talks were settled a day after the ADB’s $305 million funding proposal was approved by a Planning Commission deputy chairman-led Design Approval Committee.
According to the Ministry of Planning and Development, a meeting of the Idea Clearance Committee was held on Monday to discuss the funding proposal for relief services under the ‘Emergency Assistance to Combat Covid-19 Pandemic,’ worth $305 million.
The $305 million packages are part of the overall Covid-19 National Emergency Preparedness and Response Plan Pakistan National approved by the Planning Commission in March this year. The total package is worth $588 million including a loan from the World Bank for $238 million.
Pakistan had sent an official request to the ADB on March 25, 2020, for $300 million in the emergency loan. The remaining $5 million in grant funding.
The ADB would provide the poor and disadvantaged with $200 million in loans for social security, and $105 million for emergency preparedness for public safety.
The $200 million or Rs32 billion will be used for additional Rs4,000 cash transfers to existing 4.5 million beneficiaries and unconditional Rs2000 cash transfers every month to the existing poorest Benazir Income Support Program (BISP) recipients.
This will allow the BISP to expand the coverage to the next level of poor families, whose financial status is likely to deteriorate due to Covid-19’s socio-economic effects as the situation unfolds over time.
Through the BISP the government aims to target nearly 18 million people to provide them with cash assistance to offset the effect of Covid-19 on their livelihoods. The process of disbursing money to an additional 12 million beneficiaries remains slow, particularly to daily wagers who under the PM relief package will receive one-time Rs12,000.
The Prime Minister has launched an e-portal to register the daily wage employees, meaning that nearly six million people are unable to reach before Eid.
Furthermore, Planning Commission Deputy Chairman Jahanzeb Khan said that the government was exploring avenues to assist those directly affected by the coronavirus pandemic that was previously not eligible for financial assistance from the BISP.