World Bank Pakistan chief refutes reports indicating delay in loans' approval

World Bank Country Director for Pakistan Najy Benhassine said on Thursday that “press reports that refer to a World Bank decision to delay approval of potential bank operations in Pakistan are unfounded.”

“The tentative board approval dates of all of our proposed operations, as well as their amounts, are indicative and the World Bank decides on the timing for sharing project proposals for board consideration following due process and based on the proposed projects’ readiness.”

On Wednesday, news circulated that the multilateral lender had delayed the approval of two loans for Pakistan worth $1.1 billion until the next fiscal year, pending some steps on the country’s energy debt and tariffs.

The approval of the loans has been pending since June. Pakistan’s next fiscal year starts in July.

A major issue is the circular debt management plan in the energy sector and tariff revision.

Pakistan is still reeling from devastating floods that have led to losses of more than $30 billion. Foreign exchange reserves held by the State Bank of Pakistan fell to $4.3 billion earlier this month, barely enough for three weeks of imports.

At an event on Wednesday, Governor State Bank of Pakistan (SBP) Jameel Ahmad expressed optimism that Pakistan’s foreign exchange reserves position will improve as the country is expected to witness inflows of funds in the coming days.

“We are expecting inflows from next week onwards, which would reduce pressure on our foreign exchange reserves,” the SBP governor said in his address at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in Karachi.

Ahmad expressed his commitment to addressing the issues of industrialists and said the FX reserves of the country have depleted to a low level. “However, we will see a surge in reserves as projects in the pipeline will soon start to materialise, which will improve our capacity to facilitate businesses,” he said.

At another event on Wednesday, Ahmad said that the UAE has rolled over $2 billion loan and assured the businessmen of facilitating their imports on a suppliers’ credit.

During a meeting with the office-bearers and members of the Karachi Chamber of Commerce and Industry (KCCI), he said that the UAE rolled over $2 billion.

A large number of importers present in the meeting demanded of the central bank for the immediate release of nearly 5,700 containers of import goods, which are stuck at seaports and sought the EFI permission for imports.