Amidst challenges in project implementation and growing calls for transparency from multilateral and bilateral lenders, Pakistan’s caretaker government, represented by Finance Minister Dr. Shamshad Akhtar, appealed for additional international financial support. The plea, made during engagements with lenders and development partners, focused on securing assistance for climate-related initiatives, particularly ‘debt for nature and debt for social development swaps,’ aligning with Pakistan’s climate finance targets.
Dr. Shamshad Akhtar presented the appeal in preparation for the upcoming UN Climate Change Conference (COP-28), scheduled from Nov 30 to Dec 12 in Dubai. The discussions involved key representatives from various multilateral and bilateral lenders. The finance minister, acknowledging the adverse global financial market conditions, has deferred plans for a conventional Eurobond. Instead, efforts are underway to access climate financing, including through relevant bonds like Environmental, Social, and Governance (ESG) bonds, once the credit rating improves post the disbursement of the $700 million second tranche from the $3 billion IMF program.
In light of the upcoming COP-28, the minister emphasized the optimization of capital from Multilateral Development Banks (MDBs) and increased lending headroom. The appeal for debt-for-nature and debt-for-social-development swaps reiterated Pakistan’s commitment to achieving climate finance targets.
However, project preparation and implementation have posed significant challenges, hindering the disbursement of committed funds from lenders. Transparency and accountability, particularly in foreign-funded projects like the China-Pakistan Economic Corridor (CPEC) and the Special Investment Facilitation Council (SIFC), have been emphasized by both the IMF and the World Bank.
Representatives from various international organizations and development partners, including the World Bank, European Union, Asian Development Bank (ADB), USAID, UNDP, Germany, Japan, WFP, IFAD, JICA, KOICA, Agence Francaise Development, KfW, and UNICEF, pledged continued support to Pakistan. They stressed the importance of transparency, alignment with government priorities, and timely disbursement of committed support. Project delays were acknowledged as a major concern, prompting the finance minister to address the issues with the Prime Minister’s Office and provincial governments.
Dr. Akhtar appealed to donors for expertise and technical assistance to ensure timely project implementation for Pakistan’s socioeconomic development. A comprehensive review of the federal project portfolio funded by ADB and the World Bank was conducted, addressing successful and problematic projects in infrastructure restoration, border crossing point improvements, digital payments accessibility, housing finance, tax base broadening, adaptive social protection, and higher education sector enhancement. The urgent need to address problematic projects and establish clear deliverables with timelines was emphasized to prevent time and cost overruns.
