Aug 13 - 19 , 2001

$372 million ADB loan soon

The Asian Development Bank (ADB) has agreed to offer $372.4 million this year for undertaking four development projects. Sources in the ADB said on Thursday the bank would extend $150 million loan for Agriculture Development Programme. The processing of the loan was currently being finalized.

"The loan is likely to be approved by our Board by November/December this year," a source said. He said Legal and Judicial Reform Loan has been renamed as Access to Justice Programme Loan and its size was likely to be increased from $150 million to $200 million.

The appraisal of the loan has begun and would be finalized next week during discussions with the Pakistani officials. The sources said the bank would extend $21 million for NWFP's Urban Development Project. This would also be finalized this month for which talks were in an advanced stage.

The ADB is to offer a grant of $1.4 million for fiscal decentralization to help the district governments. Some of the details have been discussed and finalized between the ADB and the National Reconstruction Bureau. However, while the ADB had previously agreed to extend $150 million for the restructuring of Karachi Electricity Supply Corporation (KESC), it has expressed concern over its more than 30 per cent line losses. These losses, the bank believes, had not been controlled and that the matter needed urgent attention of the government.

The bank is of the view that a continuous drainage from the budget to KESC would be a significant burden for the economy. "It will deepen the budget deficit and divert public funds from more productive sectors in the economy with subsequent adverse impact on poverty. Continuous public investment in KESC nourishes corruption, adversely affecting the most vulnerable groups of consumers.

$459m debt repayment accords signed

Pakistan has concluded debt rescheduling accords worth $459 million with eleven donor countries. The rescheduling treaties with the rest of the seven donor states are due to be inked by the deadline (Aug 31), official sources told APP here Tuesday.

The pacts with donor states, which are in the pipeline, include USA - $392 million, Japan - $598 million, South Korea - $166 million, Switzerland $18 million, the Netherlands - $17 million, Sweden - $40 million, Belgium (Non-ODA) - $8 million and Russia - 17 million. The debt agreements inked with eleven donor states include Norway, Denmark, Finland, Germany, France, Italy, Belgium (ODA), Spain, UK, Canada and Austria.

Pakistan will also sign rescheduling accords worth $23 million with non-Paris Club members including Czech Republic, UAE, Saudi Arabia, Kuwait and Libya, completing the whole rescheduling process of $1.8 billion before September 2001, the sources added.-APP

Rupee up 20 paisa in inter-bank market

The rupee on Thursday gained 20 paisa against the US dollar in inter-bank market chiefly due to larger than normal inflow of export proceeds. Bankers said the rupee closed at 64.00/64.10 to a dollar up 20 paisa from the previous close of 64.20/64.30. They said the rupee gained strength on an additional inflow of more than $10 million mostly through export proceeds.

Khushhali Bank

Khushhali Bank, the first micro credit bank of Pakistan, after successful completion of pilot operations in four districts, is all set to open branches in 30 districts across the country.

NIT to launch 3 new products

National Investment Trust (NIT), which had outperforme the capital market by a margin of 18 per cent and four per cent during the year 1999-2000 and 2000-2001 respectively, is actively working to introduce three new products in near future to attract potential local and foreign investors.

SBP further lowers T-bill yields

The State Bank on Wednesday lowered the yields on treasury bills of different tenures by 16-28 basis points to siphon off Rs8.4 billion from inter-bank money market against a target of Rs1.7 billion only.

The SBP said it sold Rs8.8 billion worth of bills at discounted rates, mopping up Rs8.4 billion from a liquid inter-bank money market. It said the auction of T-bills had attracted total bids worth Rs23.7 billion of which it accepted Rs8.8 billion bids and scrapped the remainder.

Merger, winding up

The government has decided to reduce the number of Development Financial Institutions (DFIs) from 17 to 3 only, through their mergers and, in some cases, by altogether disbanding them.

Official sources said on Tuesday that poor performance of most of the DFIs has forced the authorities to either disband them or manage their mergers, preferably before the end of 2001. The World Bank was expected to extend $250 million loan for restructuring the NCBs and the DFIs.

$2bn power investment plan hits snags

Reluctance on the part of the government to prepare a model Power Purchase Agreement (PPA) has become a major bottleneck in the $2 billion investment plan by a Swedish company to set up a wind-powered electricity generation project, Dawn reliably learnt.

Interestingly, the WAPDA Chairman, Lt-Gen Zulfiqar Ali Khan, has already issued a letter of intent to Milergo AB of Sweden and M/s Golden Valley Company for setting up two wind energy stations to produce 20MW of electricity, a source said.

Rs65.74bn recovered by NAB

A total of 142 people, including politicians, bureaucrats and businessmen, were convicted by the national accountability courts by Aug 1, 2001, official sources said on Sunday.

The National Accountability Bureau also recovered a total of Rs 65.74 billion by this period in the form of bank loans, plea bargains, court fines and through improvement in financial affairs in the public sector.