Remaining funds of first tranche of World Bank loan: ECC approves Rs7.6bn TSG for PKR cover

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved a technical supplementary grant (TSG) of Rs7.622 billion for the provision of rupee cover for the remaining funds of the first tranche of the credit line of US $85 million obtained from the World Bank.

On a summary moved by the Finance Division’s Internal Wing, the approval was granted.

The meeting was informed that Pakistan Mortgage Refinance Company Limited (PMRC) has been set up as a joint initiative of the government of Pakistan and commercial banks, Development Finance Institutions with the support of the International Finance Corporation (IFC) and the World Bank (WB) to provide medium- and long-term funding to primary mortgage lenders.

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The ECC of the Cabinet in its meeting held on 29-11-2022 approved a summary regarding the launch of a new scheme titled Credit Guarantee Scheme under the Credit Guarantee Trust Fund through the second Supplemental Trust, Deed with an amount of US$85 million provided by the WB for risk coverage to financing institutions; i.e., banks and DFIs in the housing sector.

The meeting was further told that a rupee cover of Rs14.622 billion was required for the first tranche of US$50 million, which was released by the World Bank on 30-06-2023. However, in order to enable the PMRC to honour commitments with the partner banks, the Finance Division could only release funds amounting to Rs7,000,000,000 or (Rs7 billion) for the credit line to PMRC’s account given the fiscal constraints.

In view of the above, a TSG of Rs7.622 billion as the remaining rupee cover for the first tranche of US$50 million released earlier by the WB may be approved for transfer to the PMRC’s account.

Copyright Business Recorder, 2024