Pakistan seeks massive ADB loan to tackle remaining Rs1.7tr circular debt |
ISLAMABAD: Pakistan on Wednesday sought substantive additional debt from the Asian Development Bank (ADB) to payoff remaining Rs1.7 trillion circular debt and refinance part of recently acquired Rs1.25tr commercial financing in one-go at longer terms for bringing down expensive power tariffs and improving grid stability through demand growth.
The request was formally made by Power Minister Sardar Awais Leghari to a visiting ADB delegation led by Ms Leah Gutierrez, Director General, Central and West Asia Department though he did not pitch size of the proposed loan to be discussed subsequently. ADB’s total debt stock currently stands at $17bn, the third largest after China and the World Bank.
Informed sources told Dawn that the minister proposed that the Manila-based lending agency should come up with financing instruments and arrangements that could directly make power sector debt more affordable through longer payback period and cheaper interest rates than commercial financing from the market. The ADB’s financing and other instruments could also be leveraged to prolong debt-repayment periods.
This would enable the government to avoid budgetary........