The Asian Development Bank has postponed the approval of the second $400 million tranche of a $2 billion loan for energy sector reforms due to the government’s inability to meet many of the preconditions that it had promised to deliver on before the lender’s most recent board meeting, local media sources stated.
As of now, the Board of Directors of the Manila-based lending agency will not take up Pakistan’s case for approval of a $400 million loan in its June 29 meeting, according to officials at the Finance Ministry. The ADB’s decision to defer the approval deals a blow to the government that has been making claims of progress on the energy front.
The government was eager that the ADB should approve the loan before June 30 – the last day of the outgoing fiscal year 2015. The delay in approval will disturb its plans to build foreign currency reserves to the satisfaction of the International Monetary Fund besides denting the government’s claims of success in improving the mostly state-owned energy sector, according to reports.
“We are continuously working to comply with all the prior conditions set by the ADB for the approval of the loan,” said a senior official of the Finance Ministry. The official insisted that the delay would not adversely affect the government’s plans, reportedly.