Almost 90pc of Geneva pledges are project loans, Dar reveals

Finance Minister Ishaq Dar revealed on Wednesday that almost 90 per cent of pledges made by the international community at a donors' conference in Geneva for flood-hit Pakistan were project loans that will be rolled out over the next three years.

Earlier this week, the international community committed to give Pakistan a huge sum exceeding $10bn to help it recover from last year's devastating floods.

Officials from some 40 countries as well as private donors and international financial institutions had gathered for the meeting, co-hosted by Islamabad and United Nations.

During a press conference alongside Prime Minister Shehbaz Sharif and other members of the federal cabinet, Dar said that $8.7bn of the pledges were loans. He did not reveal what the terms of these loans were. However, the prime minister said "we expect the terms to be lenient".

Dar highlighted that project loan financing had already crossed $8bn, which included commitments from the Islamic Development Bank, the Asian Development Bank, the Asian Infrastructure Investment Bank, and the World Bank.

"I am not incorporating the pledge made by the Saudi Development Bank on purpose here because it is not clear whether their announcement of $1bn pertains to programme lending or project loan," Dar said.

He went on to say that his team had a detailed meeting with the International Monetary Fund (IMF) team on the sidelines of the Geneva moot, adding the government would not burden the masses in the wake of any accord reached with the global lender. Dar also asked naysayers to stop spreading panic over "default" rumours, saying such elements must consider national interest above everything.

However, these developments or the pledges made at the conference will not solve Pakistan's immediate dollar liquidity crisis as is being touted by some government officials, according to a media report. With the SBP reserves already down to around $4.5bn or equivalent to less than four weeks of imports after recent loan payments to two UAE-based banks, the country direly needs an immediate cash injection. That - and probably the flood recovery pledges from multilateral lenders - is unlikely to materialise unless Islamabad mends its tense relationship with the IMF.

Foreign Minister Bilawal Bhutto Zardari termed the PM's foreign policy as "successful", saying the government achieved "two targets with a single shot". "When I say we achieved two targets simultaneously, it means we also dispelled a myth that Pakistan is isolated."

Bilawal said the requirement of $16b [for flood recovery] in times of Covid, as well as the crisis triggered by the Ukraine-Russia conflict, was "no joke".