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ISLAMABAD: The World Bank has redirected $615 million from ongoing, slow-moving projects for the flood-affected areas, money that Pakistan was unable to utilize because of several obstacles to their execution.
The Washington-based lender said this week that it will provide $2 billion to relief, rehabilitation, and reconstruction efforts in the flood-affected areas during the Climate Resilient Pakistan Conference in Geneva. The World Bank had already authorized projects, so the money wasn’t really fresh; instead, it was taken from slower-moving projects that the institution was considering cancelling loans for.
$615 million were removed from projects that had previously been approved but were experiencing delays in execution from $2 billion in promises that the World Bank had revealed at the Geneva meeting.
Martin Raiser, vice president of the World Bank for the South Asia Region, also emphasized this point during the Geneva Conference. He had said that $357 million from the current portfolio was repurposed for immediate assistance, including cash transfers, the purchase of tents and other essential necessities, as well as minor urgent rehabilitation activities.
Additionally, Raiser informed the group of lenders and contributors that an additional $258 million was raised from ongoing projects for rehabilitation, bringing the total amount of repurposed monies to $615 million.
Moreover, the WB authorized $1.3 billion worth of initiatives on December 19, 2022, to aid in the recovery, rehabilitation, and reconstruction phase. These actions, some of which were planned according to emergency protocols, were in keeping with the objectives and guiding ideas of the government’s framework for resilient recovery, rehabilitation, and reconstruction, or “4RF.”
Pakistan received promises of $9.7 billion during the Geneva meeting, including $2 billion that the World Bank had already provided in various forms.
PM Shehbaz Sharif declared during a press conference at his home upon his return from Geneva that the commitments exceeded government expectations and that if he had revealed the very low internal expectations, people could have gone crazy.
Over 90% of the overall promises, according to Finance Minister Ishaq Dar, were in the form of loans.
According to Raiser, the WB also intends to approve several new projects in Punjab, Khyber-Pakhtunkhwa, and Baluchistan that would provide more funding to help the restoration of the whole nation’s devastated areas.
The World Bank originally declared in September of last year that it would contribute $2 billion to flood-related projects. In December, a month before the Geneva summit, it authorized projects totaling $1.3 billion.
Due to the underwhelming performance of the Pakistani government at the time, several in the Ministry of Economic Affairs had asserted that they would not permit the WB to repurpose the current portfolio without realizing that the lender held the lever.
It was acknowledged that $615 million had already been taken from the projects that were running late. The termination of IDA credit was viewed as a severe issue since, although having the financial wherewithal, governments frequently lobbied for access to more affordable long-term loans.
