ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved Technical Supplementary Grant (TSG) of Rs 7.840 billion as the rupee cover against $ 42.3 million amount of the World Bank.
On May 8, 2023, the Finance Division briefed the ECC that Financial Inclusion and Infrastructure Project (FIIP) was approved by the Executive Committee of National Economic Council (Ecnec) on October 6, 2017 in line with the government’s National Financial Inclusion Strategy (NFOS-2017).
The FIP with a total portfolio of $ 137 million was initiated as a 5-year PSDP project of the Finance Division, funded by the World Bank, set to close on December 31, 2022. However, due to initial delays and Covid-19 pandemic, the project suffered time overrun. Consequently, upon request of the State Bank of Pakistan, executing agency of the project, Finance Division through EAD approached the World Bank for a 30-month no cost extension.
The World Bank Management agreed to a two-phase project timeline extension, ie, phase-1, January -June 2023 (6 months) and phase-2 July 2023-June 2025 (24 months). For the extension, one of the key actions to be completed by Finance Division was to arrange rupees cover of $ 33.1 million against the already existing FE withdrawal till June 2201 and for $ 9.2 million which were yet to be withdrawn during the current fiscal year. Therefore, Finance Division requested Ministry of Planning, Development and Special Initiatives for provision of the additional funds as Rupee cover from PSDP as supplementary grant. However, M/o PD&SI advised that FIIP project was already reflected in PSDP 2023 for the rupee cover but additional allocation as supplementary grant was not possible, Finance Division may arrange the Rupee cover as Technical Supplementary Grant from within the existing resources.
Finance Division identified surplus funds in its demand number 107“ other development expenditure“ to be surrendered for utilization as TSG equivalent/the rupee cover for the project in its demand number 106 development expenditure“.
According to sources, it was mentioned in case the rupee cover was not arranged at the earliest, $ 33.1 million would have to be returned to the World Bank. It was highlighted that the amount disbursed by the World Bank in June 2021 could not be utilized till date, given non-provision of the rupee cover. Similarly, for disbursement of $ 9.2 million, additional the rupee cover was required as well.
The Finance Division sought approval of the ECC for provision of TSG of Rs 7.840 billion as the rupee cover against an amount of $ 33.1 million already disbursed by the World Bank till June 2021 and $ 9.2 million, yet to be disbursed by the World Bank in CFY, to be moved from Finance Division demand number 107 ‘other development expenditure’ against surrender of Rs 7,840,000,000 to Finance Division’s demand number 106 development expenditure.
Copyright Business Recorder, 2023