The Board of Directors of the Asian Infrastructure Investment Bank’s (AIIB) has approved a loan of $250 million to help Pakistan strengthen its response to the social and economic fallout from the COVID-19 pandemic.
The project will be co-financed by the World Bank, which will help bolster the government’s Resilient Institutions for Sustainable Economy (RISE) Program, which aims to stimulate investment in human capital, expand social safety nets, improve the country’s emergency health infrastructure and foster economic growth.
The RISE Program is a part of a set of measures Pakistan has undertaken toward recovery from the impact of the pandemic.
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. Already, employment in the formal and informal sectors has seen a downturn 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.’
The latest loan brings AIIB’s total support to Pakistan’s COVID-19 response to $750 million.
While AIIB 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) created to support its members through projects cofinanced with the World Bank or the Asian Development Bank.
As of July 2020, AIIB’s Board of Directors has approved a total of 16 projects under the CRF amounting to over USD 5.9 billion to support 12 members in navigating the challenges of these highly uncertain times. AIIB is reviewing additional projects from its clients.
Headquartered in Beijing, the Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank with a mission to improve social and economic outcomes in Asia.