Staff Reporter
Islamabad
The government signed new agreements worth $10.447 billion of new foreign loans from multilateral institutions and commercial banks during the fiscal year 2019-20. This is according to the Annual Report on Foreign Economic Assistance 2019-20 released by Ministry of Economic Affairs. It stated that 99 percent of the new commitments were for loans and the remaining one percent were grant commitments.
Out of the total new agreements of $10.447bn, more than $6.79bn financing agreements were signed with multilateral agencies, $3.463bn with foreign commercial banks and $193 million with bilateral lenders.
The report said the high level of commercial financing worth $3.463bn, or 33 percent of the total new commitments, had been secured from commercial banks to refinance maturing commercial debt during the year. Around USD 3,463 million worth of agreements, which constituted 33% of the total new commitments, were by the commercial banks (see Figure 2). This high level of commercial financing was arranged to refinance maturing commercial debt during the year.
The Asian Development Bank has emerged as the largest development partner in terms of new commitments (30%) followed by World Bank (22%), Islamic Development Bank (7%) and Asian Infrastructure Investment Bank (5%). These five financial institutions extended financing 98% of new commitments, The country received $10.7bn in foreign assistance during the same period. The report said that 69 percent of the new commitments during FY2019-20 were made under the category of budgetary support.
“This high level of budgetary support was secured mainly to offset the socio-economic impact of Covid-19 pandemic and to meet the higher external financing requirements for external debt retirements,” it added. About 26 percent of the new commitments were allocated for project financing and 5pc for commodity financing.
