ISLAMABAD: Pakistan is planning to request a loan package from the International Monetary Fund (IMF) along with an additional $1.5 billion in climate finance.
The country is considering the possibility of increasing the overall program to a range of $7.5 to $8 billion, with the intention of including climate finance in the forthcoming bailout package, as per sources.
The inclusion of climate finance aims to augment the loan package. The IMF offers accessible, long-term financing to assist countries grappling with the challenges of climate change and pandemics.
Sources indicate that authorities are exploring avenues to raise the upcoming IMF bailout package to $7.5 to $8 billion, with the potential inclusion of climate finance.
It’s noted that during its meeting in December last year, the IMF Board of Governors approved a quota increase for all member countries, including Pakistan.
This decision could enable Pakistan to borrow between $6 to $8 billion.
Pakistan is seeking a financing arrangement similar to that of Bangladesh with the IMF, specifically targeting $1.5 billion for climate finance, as per sources.
Additionally, it’s mentioned that Pakistan must allocate initial funds towards environmental improvements before pursuing loans from global lending institutions.
Meanwhile, the International Monetary Fund (IMF) has expressed its willingness to continue working with the new government of Pakistan, disregarding the demand made by Imran Khan, the founder of Pakistan Tehreek-e-Insaf (PTI), for an audit of the election results before approving any new loans for Islamabad.
Julie Kozack, the IMF’s Director of Communications, stated during a press briefing that on January 11, the IMF provided $1.9 billion in total disbursements under the Standby Arrangement (SBA). She emphasized that the program aims to support the government’s efforts to stabilize the economy, with a particular focus on protecting the most vulnerable segments of the population.
Kozack also commended the interim government for maintaining economic stability during its tenure, noting their adherence to fiscal targets and protection of the social safety net. She highlighted the maintenance of a tight monetary policy stance to control inflation and bolster foreign exchange reserves.
She emphasized that the program is “supporting the authority’s efforts to stabilise the economy and to, of course, with a strong focus on protecting the most vulnerable.”
Regarding Imran Khan’s demand for an audit of poll results, Kozack declined to comment, stating, “I’m not going to comment on ongoing political developments.”
The IMF’s response comes after Imran Khan sent a letter to the IMF urging them to call for an audit of the February 8 election before continuing talks with Islamabad for a new loan program. Imran Khan’s counsel, Barrister Ali Zafar, asserted that democracy cannot function if the people’s mandate is stolen and claimed that rigging occurred during the general elections.
