Pakistan has signed a $772 million loan agreement for flood relief with the Asian Development Bank (ADB), taking the total loan for the year to $2.7 billion with the agency.
Ayaz Sadiq, the minister for economic affairs, and Yevgeniy Zhukov, the director general of the ADB, reportedly saw the signing of five loans totaling $772.6 million for irrigated agriculture projects, skill development, and flood rehabilitation across Pakistan.
Floods caused by abnormal monsoon rains and a melting glacier submerged huge swathes of the country earlier this year and killed nearly 1,700 people, the majority of them children and women.
According to Minister Ayaz Sadiq, the 1% interest rate for a 40-year term was agreed upon for the ADB loan.
The impression that’s being spread is that God forbid, Pakistan is going to be bankrupt, or is in financial crisis. There is nothing like that,” Sadiq said in a recorded message.
“Had there been such a situation, the ADB wouldn’t have signed these loans with us today.”
Pakistan’s low foreign exchange reserves, which are just enough to cover a month’s worth of imports, are making it challenging for the country to pay its external financing obligations.
On October 26, Asian Development Bank (ADB) transferred a $1.5 billion loan to Pakistan, quoting SBP sources