The World Bank (WB) has delayed approval of two loans worth $1.1 billion until the next fiscal year for Pakistan, which is contending high external debt and low foreign currency reserves, which could last for only three weeks, according to analysts.
The Washington-based lender’s decisions to withhold 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 will be a major jolt for the Pakistani government.
“The indicative date for (World Bank) Board discussion of the RISE-II project is fiscal year 2024, which will start on July 1, 2023 and end on June 30, 2024,” a World Bank spokesperson said.
The Shehbaz Sharif-led Pakistani government was hoping to receive an approval for at least $450 million loan in January, which would have unlocked another $450 million from the Asian Infrastructure Investment Bank, which had pegged a $450 million loan with the approval of the WB’s RISE-II.