ADB Board Ignores Indian Objections and Approves $800 Million Package for Pakistan

The Asian Development Bank (ADB) has outright ignored Indian objections and approved a $800 million financing package for Pakistan. The ADB executive director for Pakistan Noor Ahmed countered Indian allegations of misuse of ADB funds. He instead raised concerns over India’s rule in financing terrorism in Balochistan and Khyber Pakhtunkhwa. The board meeting, initially scheduled for May 28, now took place today, on June 3. The financing includes a $300 million policy loan and a $500 million guarantee to secure up to $1.5 billion in foreign commercial loans. The loan is the second tranche under ADB’s Resource Mobilization Program. The $500 million guarantee is critical due to Pakistan’s low credit rating, which remains at B- despite a recent Fitch upgrade. The ADB will charge a nominal fee for the guarantee, which is not for development projects but to support reserves.