Has World Bank delayed $1billion loan for Pakistan until next fiscal year?

ISLAMABAD – The World Bank on Thursday rejected media reports claiming a delay in approving loan for Pakistan as "unfounded" and "baseless."

In a series of tweets, WB Country Director for Pakistan Najy Benhassine said: “The press reports that refer to a World Bank decision to delay approval of potential Bank operations in Pakistan are unfounded”.

“The tentative Board approval dates of all of our proposed operations, as well as their amounts, are indicative, and the World Bank decides on the timing for sharing project proposals for Board consideration following due process and based on the proposed projects’ readiness,” he clarified.

(2/2) …the World Bank decides on the timing for sharing project proposals for Board consideration following due process and based on the proposed projects’ readiness.

— Najy Benhassine (@WBPakistanCD) January 19, 2023

Earlier, reported emerged that the World Bank has halted the release of two loans worth $1.1 billion to Pakistan until the next fiscal year 2-23-24.

Reports said the Washington-based lender has delayed the approval of the second Resilient Institutions for Sustainable Economy (RISE-II) loan worth $450 million and the second Programme for Affordable Energy (PACE-II) worth $600 million.

A World Bank official told local media that the board discussion of the RISE-II project will be held in next fiscal year which starts on July 1, 2023 and ends on June 30, 2024.

The approval of the loans was pending since June last reportedly due to circular debt in energy sector and tariff revision. The global lander has also opposed imposition of “flood levy” on imports.

Shehbaz Sharif-led federal government has been making efforts to secure financing from friendly states and loan tranche from the International Monetary Fund (IMF) which has been pending since September last, as the foreign reserves has dropped to $4 billion dollars.