Follow Us on Google News
ISLAMABAD: The government signed new agreements worth $10.447 billion of new foreign loans from multilateral institutions and commercial banks during the fiscal year 2019-20.
This is according to the Annual Report on Foreign Economic Assistance 2019-20 released by Ministry of Economic Affairs. It stated that 99 percent of the new commitments were for loans and the remaining one percent were grant commitments.
Out of the total new agreements of $10.447bn, more than $6.79bn financing agreements were signed with multilateral agencies, $3.463bn with foreign commercial banks and $193 million with bilateral lenders.
The report said the high level of commercial financing worth $3.463bn, or 33 percent of the total new commitments, had been secured from commercial banks to refinance maturing commercial debt during the year.
Around USD 3,463 million worth of agreements, which constituted 33% of the total new commitments, were by the commercial banks (see Figure 2). This high level of commercial financing was arranged to refinance maturing commercial debt during the year.
The Asian Development Bank has emerged as the largest development partner in terms of new commitments (30%) followed by World Bank (22%), Islamic Development Bank (7%) and Asian Infrastructure Investment Bank (5%). These five financial institutions extended financing 98% of new commitments,
The country received $10.7bn in foreign assistance during the same period. The report said that 69 percent of the new commitments during FY2019-20 were made under the category of budgetary support.
“This high level of budgetary support was secured mainly to offset the socio-economic impact of COVID-19 pandemic and to meet the higher external financing requirements for external debt retirements,” it added.
About 26 percent of the new commitments were allocated for project financing and 5pc for commodity financing. The new commitments were higher than budgeted in view of the COVID-19 pandemic.
An amount of $7.5bn had been committed as budgetary support, of which $4bn was committed by multilateral as programme financing and the remaining from foreign commercial banks.
The major share (40pc) of new commitments was meant for transport and communication in FY2019-20, followed by 19pc for health, 12pc for physical planning and housing, 10pc for rural development and poverty reduction, 9pc for power sector and 6pc for agriculture.
On the other hand, the total disbursement of foreign loans in FY2019-20 amounted to $10.7bn slightly lower than $10.8bn during same period of FY2018-19. Of these, 97 percent disbursements were loans and the remaining were grants.
The disbursements included $6.5bn by multilateral and bilateral lenders as compared to $4.1bn last year, registering a growth of 59pc. In addition, the government also raised $3.4bn from foreign commercial sources to meet its external debt obligations and support balance of payments.
Disbursements of $10.7bn were mainly under the projects and programme loans or grants from multilateral, bilateral and financial institutions. This included $5.645bn or 53pc of total disbursements from multilateral banks mainly ADB, IDB, AIIB and World Bank.
An amount of $3,373m or 32pc of the total disbursements was from foreign commercial banks mainly for refinancing of maturing commercial debt. Another $1.644bn or 15pc of the disbursements was from bilateral lenders, particularly Saudi Arabia, China and the United Kingdom.
As of June 30, 2020, Pakistan’s total external public debt amounted to $77.9bn, compared to $73.4bn during the same period last year. The report showed total external public debt from three key sources — 51pc multilateral debt, followed by 31pc bilateral debt, including China’s SAFE deposits, and the remaining 18pc from foreign commercial banks and institutions, including Eurobonds and Sukuk.
During FY 2019-20, Pakistan paid $10.4bn on account of debt servicing of external public loans, including principal payment of $8.5bn and $1.9bn in interest payments.
