Pakistan faces a delay of $1.1 billion in project loans from the World Bank and the Asian Development Bank, officials at the multilateral institutions said on Wednesday, as the government prepares to renegotiate conditions imposed by the International Monetary Fund to approve the remaining tranches of a $6 billion loan program which began in 2019.

Apart from the delay, the World Bank has cut down the size of its Securing Human Investments to Foster Transformation (SHIFT-II) program and the Program for Affordable and Clean Energy (PACE) from $500 million to $400 million and postponed the approval of a loan under the Resilient Institutions for Sustainable Economy (RISE-II) program.
“The amounts for SHIFT-II and PACE, at $400 million each, were jointly agreed upon by the Government of Pakistan and the World Bank,” Mariam Sara Altaf, the bank’s spokesperson in Pakistan, told Arab News on Tuesday.
Asked about the delay in the approval of RISE-II, she said it was due to process requirements.
The program supports reforms to broaden the tax base, strengthen debt management and transparency, and implement urgently needed reforms to achieve financial viability of the power sector.
“RISE-II has been delayed to accommodate the processes required by the government to implement the reforms outlined in the program,” Altaf said, adding: “SHIFT-II and PACE are scheduled for the board’s consideration on June 28.”
Pakistan is also facing delayed approval of the second tranche of a $300 million loan from the Asian Development Bank for the Energy Sector Reforms and Financial Sustainability Program.
“We will continue to work closely with other international financial institutions to ensure consistency and complementarity in the policy dialogue with the government,” F. Cleo Kawawaki, acting country director of the ADB in Pakistan, told Arab News. “An energy sector policy-based loan is in the pipeline for 2021. The ADB has been working in partnership with the Government of Pakistan in the energy sector and in infrastructure investment and reforms.”
Pakistan is also trying to negotiate with the IMF to get some relaxation in the conditions attached to the $6 billion loan program.
Pakistan’s newly appointed finance minister Shaukat Tarin has consistently called for the review of the IMF conditions which primarily focus on power tariffs and tax hikes.
“The World Bank and the Asian Development Bank have linked their lending to the IMF review for at least the last two years,” Dr. Vaqar Ahmed, joint executive director at the Sustainable Development Policy Institute, told Arab News on Wednesday. “If the program review goes smoothly, their lending to Pakistan will also happen more easily since they have linked their documents with the macroeconomic stability.”
Ahmed said the World Bank and the Asian Development Bank would wait for the outcome of the Pakistan-IMF renegotiations.
Pakistan’s finance ministry did not respond to Arab News queries by the time this story was filed.