AIIB approves $250 million loan to mitigate COVID-19 impact

BEIJING: The Asian Infrastructure Investment Bank’s (AIIB) has approved a loan of $250 million to help strengthen Pakistan’s response against social and economic fallout from the COVID-19 pandemic.

The development policy is co-financed with the World Bank and will help bolster the government’s Resilient Institutions for Sustainable Economy (RISE) Program.

The RISE Program is a part of measures Pakistan has undertaken toward recovery from the impact of the pandemic. It aims to stimulate investment in human capital, expand social safety nets, improve emergency health infrastructure and foster economic growth.

The Beijing-based lender said the health crisis is expected to have far-ranging and long-term repercussions on growth, which may undermine the hard-fought progress the country has made in restoring macroeconomic stability.

It said that employment in the formal and informal sectors has seen a downturn with the poor, women and other vulnerable groups disproportionately affected.

“The pandemic has rapidly evolved in Pakistan and now threatens to undo many of the hard-won gains made in reducing poverty over the past two decades,’ AIIB Vice President, Investment Operations Konstantin Limitovskiy, said in a statement.

“Our immediate support is critical and will contribute to the government’s efforts to mitigate pandemic-related shocks, so that the country may continue on its path to sustainable development.”

The latest loan brings AIIB total support to Pakistan’s COVID-19 response to $750 million. The bank is extending such financings on an exceptional basis under its COVID-19 Crisis Recovery Facility (CRF) created to support its members through projects cofinanced with the World Bank or the Asian Development Bank.

As of July 2020, AIIB’s Board of Directors have approved sixteen projects under the CRF amounting to over $5.9 billion to support 12 members in navigating the challenges of these highly uncertain times.