ADB approves $500mn loan to strengthen Pakistan's COVID-19 health, economic response

ISLAMABAD: The Asian Development Bank (ADB) has approved a $500 million loan to help the government of Pakistan deliver social protection programs to the poor and vulnerable, expand health sector capabilities, and deliver a pro-poor fiscal stimulus to boost growth and create jobs as the country fights the novel coronavirus disease (COVID-19) pandemic.

“The COVID-19 pandemic hit Pakistan at a critical point in its ongoing economic recovery program,” said ADB President Masatsugu Asakawa.

“We are fully committed to supporting Pakistan through this difficult period. This loan will help plug selected funding gaps as the government implements its countercyclical development plan, including strengthening the country’s social safety net and health sector capacity.”

COVID-19 is expected to lead to a sharp decline in growth, revenue collection, and significant job losses in Pakistan.

The country’s health response is hampered by a low number of health workers relative to the population and inadequate availability of hospital beds.

ADB’s COVID-19 Active Response and Expenditure Support (CARES) Program will support various government initiatives, including cash assistance payments to 3 million daily wage workers, of whom approximately 23pc are women, and cash grants to 7.5 million families under the Kifalat social protection program.

The program will also help fund the acquisition of additional ventilators and COVID-19 protective kits for medical staff, including appropriately sized personal protective equipment for women.

To prevent job losses, the loan will support young entrepreneurs, including at least 25pc women, through the government’s youth entrepreneur scheme, Kamyab Jawan.

ADB’s CARES Program will facilitate parallel financing of $500 million from the Asian Infrastructure Investment Bank and another $500 million from the World Bank’s Securing Human Investments to Foster Transformation (SHIFT) development policy credit program.

The CARES Program was developed in close coordination with these development partners, the International Monetary Fund, and other bilateral donors.

The loan is funded through the COVID-19 pandemic response option (CPRO) under ADB’s Countercyclical Support Facility.

CPRO was established as part of ADB’s $20 billion expanded assistance for developing member countries’ COVID-19 response, announced on 13 April.

Visit ADB’s website to learn more about its ongoing response.

The CARES Program is part of ADB’s integrated package of support to help the Government of Pakistan’s immediate efforts to mitigate the significant negative health, social, and economic impacts of the COVID-19 pandemic.

On 19 May, ADB approved a $300 million emergency assistance loan to strengthen Pakistan’s public health response to the pandemic and help meet the basic needs of vulnerable and poor segments of society.

On 9 April, ADB reallocated $30 million from the National Disaster Risk Management Fund (NDRMF) Project and the NDRMF Board of Directors allocated an additional $20 million to procure medical equipment to strengthen hospitals, and other medical facilities in Pakistan.

In March, ADB approved $2.5 million in grants to help Pakistan purchase PPE and other medical supplies.