What are Geneva pledges and how can Pakistan receive $ 3.4 billion?

ISLAMABAD: After a devastating flood in Pakistan in 2022, a donors meeting was held in Geneva in January 2023 in which international donors committed over $10.9 billion to help Pakistan recover from ruinous floods, exceeding its external financing goals and paving the way for a new model on raising funds to fight climate disasters in poorer countries.

The meeting was attended by officials from some 40 countries as well as private donors and international financial institutions and announced funds for Pakistan for the recovery of flood victims, these announcements are called Geneva pledges.

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For receiving these funds Pakistan had to execute some infrastructure projects. Now Pakistan is expected to receive approximately $3.4 billion out of $10.9 billion pledges.

Out of the $10.9 billion pledges committed at Geneva, a major chunk of funding was committed in the shape of commodities financing, oil facility, and re-purpose of funds so the net funding was left only for the execution of development projects for flood-affected areas.

An in-depth analysis of $10.9 billion pledges shows that the Islamic Development Bank (IsDB) committed $4.2 billion through ITFC for commodities and oil financing over a period of three years. The remaining commitment stood at $6.7 billion.

The Saudi Fund for Development (SFD) committed $1 billion for an oil facility which is expected to expire in December 2023. The Paris Club countries had pledged $1.2 billion so the remaining amount was standing at $4.5 billion.

Officials said the multilateral creditors had re-purposed around $1.127 billion for flood-affected areas out of which the World Bank re-purposed $299 million, Asian Development Bank (ADB) $78 million, and Asian Infrastructure Investment Bank (AIIB) $750 million.

After excluding the re-purpose funding of $1.1 billion, the remaining pledged net amount for construction in flood-hit areas stood at just $3.4 billion.

Now the Government of Pakistan has approved the execution of almost 13 development schemes for flood-affected areas out of which six projects were approved for Sindh, five projects for Balochistan, and one project each for Punjab and Khyber Pakhtunkhwa. The progress on the ground has so far been dismally slow in Balochistan.

As far as the disbursement of the committed amount is concerned, Pakistan has only received $1.48 billion in the shape of both project loans and commodities financing from multilateral and bilateral creditors out of total Geneva pledges of $10.9 billion.

The project financing has remained dismally slow and stood at just $780 million as of September 2023.

According to an official statement, the Ministry of Planning Development & Special Initiatives has expedited the process for implementation of development projects being executed in the flood-affected area under the Resilient, Recovery, Rehabilitation & Reconstruction framework (4RF) as the second meeting of Federal Steering Committee on 4RF was held.

The Federal Steering Committee on 4RF was constituted for the implementation of development projects in the flood–affected areas after the flood of 2022 which badly affected the country, particularly Balochistan and Sindh.

Pakistan faced unprecedented devastation due to torrential rains and flooding in most parts of the country, affecting 33 million people and resulting in economic losses of $30 billion.

Representatives from the Ministry of Climate Change and EAD gave a detailed briefing on the implementation status of the development projects, while representatives from all provinces, including AJK and GB, briefed the committee on the working progress on provincial Recovery and reconstruction Units (RRUs).

It was further appraised that an exclusive dashboard for 4RF would be placed at the planning ministry that would ensure real-time monitoring and provide information to the donors and development partners. The provinces were asked to submit the lists of their respective projects.

Similarly, it was informed that a Monitoring and Evaluation Framework was being strengthened to ensure community and partner participation to provide an independent assessment of the equity and transparency of all flood reconstruction spending.

In October 2022, the Post-Damage Needs Assessment (PDNA), conducted jointly by the Government of Pakistan and its international development partners, including the World Bank, the Asian Development Bank, the European Union, and UN relief agencies, estimated the total cost of the calamity at $30 billion.