ISLAMABAD, KARACHI: A technical mission of the International Monetary Fund (IMF) has reached Pakistan to hold talks on climate financing during its three-day stay, Finance Minister Muhammad Aurangzeb said on Monday.
Speaking to the media, Aurangzeb further said that a second IMF team would visit next month to discuss matters pertaining to the country’s $7 billion Extended Fund Facility (EFF).
The federal minister’s confirmation comes after IMF’s resident chief Mahir Binici said that two missions were due in Islamabad, with the first delegation set to focus on discussions regarding authorities’ request for assistance under a Resilience and Sustainability Facility (RSF) arrangement, whereas the second one was to review the country’s progress under the latest bailout programme.
According to well-placed sources, the four-member mission has held an introductory meeting with the officials at the Ministry of Finance and will engage in technical discussions commencing today.
Noting that the IMF officials will hold negotiations with the federal government as well as provinces, the sources added that the lender’s team will also take up issues including green budgeting, tracking and reporting on climate change.
The climate change-related discussions come against the backdrop of Islamabad’s request for $1 to $1.5 billion in funding to augment the existing loan of $7 billion under EFF up to $8 or $8.5 billion.
The findings of this technical mission, the sources had claimed earlier, firm up on the occasion of the first review under the EFF arrangement as the IMF review mission is scheduled to visit Islamabad by early next month probably from March 4, to discuss various sectors of the economy for almost 10 to 12 days period after which the Fund staff would take at least four to six weeks period for presenting its report before the IMF’s executive board, provided both sides struck a staff-level agreement in the upcoming review talks.
It is pertinent to know that the first review and approval of a $1 billion tranche by the Executive Board of IMF is scheduled to be done by April 2025.
10-point PSDP report
In order to qualify for RSF, Pakistan has prepared a Public Investment Procedures and Parameters report under the IMF conditions and its major contours will be discussed during the upcoming parleys with the technical team of the IMF.
The federal government has also agreed with the IMF that no provincial nature project will be financed from the federal development allocation in the PSDP.
This report incorporated 10 factors on the basis of which the next Public Sector Development Program (PSDP) schemes is going to be selected including (i) Strategic and core ongoing projects, (ii) Projects with 80% plus expenditure with realistic completion estimate, (iii) Exceptional and high scoring infrastructure projects (iv) Pre-scrutinised DDWP approved projects against given criteria, (v) Foreign-funded projects with adequate rupee cover allocation within IBC, (vi) Provincial nature projects in 20 least developed districts, (vii) Projects in newly-merged districts (NMDs) and other areas to ensure equitable regional development, (viii) PPP projects, where PSDP funding is either used as equity or as viability gap, (ix) Climate responsive and resilient projects, (x) Ready for investment projects.
It has also been decided with assent of the National Economic Council (NEC) that only 10% of new projects will be included in the PSDP list from the next budget for 2025-26.
