July 22, 2020: The Beijing-backed Asian Infrastructure Investment Bank (AIIB) said on Wednesday it would lend $250 million to Pakistan to help the country deal with the effects of the COVID-19 pandemic.
Co-financed with the World Bank, this development policy financing will help bolster the government’s Resilient Institutions for Sustainable Economy (RISE) Program, which aims to stimulate investment in human capital, expand social safety nets, improve the country’s emergency health infrastructure and foster economic growth. The RISE Program is a part of the set of measures Pakistan has undertaken toward recovery from the impact of the pandemic.
“The pandemic has rapidly evolved in Pakistan and now threatens to undo many of the hard-won gains made in reducing poverty over the past two decades,’ said AIIB Vice President, Investment Operations, Konstantin Limitovskiy. ‘Our immediate support is critical and will contribute to the government’s efforts to mitigate pandemic-related shocks, so that the country may continue on its path to sustainable development.’
The AIIB has previously approved a loan of $500 million for Pakistan’s response to COVID-19. Both loans are part of the AIIB’s $10 billion funding facility to help public and private sectors fight the outbreak.
While AIIB does not have a regular instrument for policy-based financing, the Bank is extending such financings on an exceptional basis under its COVID-19 Crisis Recovery Facility (CRF) created to support its members through projects cofinanced with the World Bank or the Asian Development Bank.
As of July 2020, AIIB’s Board of Directors has approved a total of 16 projects under the CRF amounting to over USD5.9 billion to support 12 members in navigating the challenges of these highly uncertain times. AIIB is reviewing additional projects from its clients.