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COVID-19 economic fallout: AIIB approves $250m loan to Pakistan

COVID-19 economic fallout: AIIB approves $250m loan to Pakistan

ISLAMABAD: The Asian Infrastructure Investment Bank’s (AIIB) Board of Directors have approved a loan of $250 million to help Pakistan strengthen its response to the social and economic fallout from the COVID-19 pandemic, said the financial institution in a press release on Wednesday.

The AIIB said that the loan is co-financed by the World Bank, adding that this development policy financing will help bolster the government’s Resilient Institutions for Sustainable Economy (RISE) Programme.

The RISE Program is a part of a set of measures Pakistan has undertaken towards recovery from the impact of the pandemic. The programme aims to stimulate investment in human capital, expand social safety nets, improve the emergency health infrastructure and foster economic growth.

The investment bank stated that the latest loan brings AIIB total support to Pakistan’s COVID-19 response to $750 million.

The statement mentioned that the health crisis is expected to have far-ranging and long-term repercussions on growth, which may undermine the hard-fought progress the country has made in restoring macroeconomic stability.

The AIIB said that pandemic has taken a toll on employment in the formal and informal sectors, with the poor, women and other vulnerable groups disproportionately affected.

“The pandemic has rapidly evolved in Pakistan and now threatens to undo many of the hard-won gains made in reducing poverty over the past two decades,’ said AIIB Vice President, Investment Operations, Konstantin Limitovskiy.

“Our immediate support is critical and will contribute to the government’s efforts to mitigate pandemic-related shocks, so that the country may continue on its path to sustainable development,” he said.

The AIIB said it does not have a regular instrument for policy-based financing, the Bank is extending such financing on an exceptional basis under its COVID-19 Crisis Recovery Facility (CRF) to support its members through projects co-financed with the World Bank or the Asian Development Bank.