Pakistan is seeking the support of international financial institutions (IFI) to set up a new institution to facilitate long-term investment for infrastructure projects, an official source said.
The government plans to undertake massive new infrastructure developments in the next few years to take complete advantage of the China-Pakistan Economic Corridor. The major infrastructure priorities of the incumbent government include highway projects, railways, energy, dams, and industrial projects.
In order to assess the readiness of the IFIs, Finance Minister Ishaq Dar held a meeting with a delegation of the International Finance Corporation (IFC) on Wednesday.
The delegation, led by IFC Pakistan Country Manager Nadeem Siddiqui, attended the meeting on the invitation of the finance minister to discuss the IFC’s portfolio and infrastructure projects in Pakistan.
The minister proposed that the IFC work with the government of Pakistan to establish a new institution in Pakistan which will mobilise long-term financing needs of infrastructure projects through the private sector. He said that the majority of equity for the proposed institution may be provided by the IFC and other IFIs, while the government may be a minority shareholder. He said that the proposed new institution shall be a private sector led financing platform, supporting development across key sectors in the form of public-private partnerships (PPPs) or other types of private investments in infrastructure.
Siddiqui said that the IFC welcomed the finance minister’s proposal to establish such an institution focused on catalysing private sector financing and investment in infrastructure projects. He expressed keen interest on behalf of the IFC to work with the government to establish the proposed institution.
He said that the IFC will, in due course, submit a detailed working on the new institution for the minister’s consideration with a clear action plan going forward, in order to establish the new institution in a timely and orderly manner.
The minister said that the government welcomes all opportunities to partner and collaborate with IFIs and multilateral organisations for the development and betterment of the country. Dar said that increased private sector investment in infrastructure projects will further assist in addressing the development needs of the country and generating higher GDP growth.
The meeting was attended by senior officials of the ministry of finance and the IFC.