Pakistan assures financial commitments to IMF

Aftab Ahmed

The PTI government has secured a US$10.8 billion loan from China in 2021 for retiring international financing commitment in the next 12 months.

The PTI government has informed International Monetary Fund (IMF) that the gross external financing needs for the next 12 months (April 2021-March 2022) will amount to US$25 billion, of which about US$17 billion is amortizations to multilateral and bilateral official and commercial creditors.

To close this gap, besides IMF, we have secured financing commitments from bilateral and multilateral partners: China US$10.8 billion, UAE US$2 billion, the World Bank US$2.8 billion, the Asian Development Bank US$1.1 billion, and the Islamic Development Bank US$1 billion, Pakistani side said.

Crucially, key bilateral creditors have maintained their exposure to Pakistan in line with program financing commitments.  We have secured adequate long-term financing from our international partners to support our economic reform program. The current projections suggest that with the policies, the Pakistani government said.

In addition, the Pakistani side said that it had benefitted from the temporary suspension of debt service to official bilateral creditors provided under the G20 DSSI initiative, which covered US$2.5 billion falling due over May 2020-June 2021 (of which US$0.8 billion related to the second round of DSSI covering January-June 2021 debt service). Moreover, good prospects remain for the remainder of the program.

Payment to IPPs

Pakistan has committed International Monetary Fund (IMF) to pay Rs 180 billion to power producers by the end of May 2021.

The government has made a commitment that reduction in CPPA-G payables to power producers through payment of up to PRs 180 billion with no more than 1/3 in cash and the remainder in debt instruments by the end-May 2021.

 Pakistan will also finalize the energy cross-subsidy reform for the FY 2022 budget by end-Jun 2021. It will notify 2020 Q4 electricity tariff adjustment for capacity payments by end-Sep 2021 9. It will also ensure adoption by parliament of amendments to the OGRA Act end-Jun 2021.

The PTI government has also assured to conduct and publish an external audit of the Utility Stores Corporation (USC) based on FY 2020 financials by end-Apr 2021. It will also establish a robust asset declaration system with a focus on high-level public officials in end-Jun 2021.