ISLAMABAD: A team from the International Monetary Fund (IMF) has arrived in Islamabad to begin discussions on IMF Pakistan climate funding on Monday. The goal is to provide over $1 billion to help the country tackle climate challenges.
The IMF will also be conducting a policy review to evaluate Pakistan’s progress under its ongoing $7 billion Extended Fund Facility (EFF) program starting next week.
The technical team will meet with key government departments, including the ministries of finance, planning, climate change, petroleum, and water resources. They will also engage with tax authorities, disaster management agencies, and provincial governments.
IMF’s representative in Islamabad, Mahir Binici, confirmed that these discussions will continue for about three weeks. He added that another IMF team will visit Pakistan in March for an official review of the EFF program and to further discuss the IMF Pakistan climate funding request under the Resilience and Sustainability Facility (RSF).
Officials say the government has prepared documents for climate-related public investment planning based on recommendations from the IMF and the World Bank.
Regarding the review of the EFF program, it is said that Pakistan has met all but one key requirement. The pending task involves changes to the Sovereign Wealth Fund, which were supposed to be completed by December. However, other related conditions, such as governance and financial safeguards, have already been met.
The government has also shared new criteria for selecting development projects under the upcoming Public Sector Development Programme (PSDP). Priority will be given to:
- Key national projects
- Ongoing projects with at least 80% spending already completed
- High-priority infrastructure projects
- Foreign-funded projects with sufficient local currency support
- Development projects in Pakistan’s 20 least-developed districts
- Climate-friendly and disaster-resilient projects, which align with the goals of IMF Pakistan climate funding
The RSF funding is designed for countries that commit to strong reforms to protect against climate disasters. It offers easier repayment terms—30 years, including a 10-year grace period—and is generally cheaper than EFF loans.
Pakistan formally asked the IMF in October to add $1.2 billion in climate funding to its existing $7 billion loan program. As discussions progress, securing IMF Pakistan climate funding could help strengthen the country’s resilience against climate-related challenges.
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