Pakistani Finance Minister Muhammad Aurangzeb said that his country aims to obtain one billion dollars through an official request to the International Monetary Fund, as part of the financing provided by the Fund to help low- and middle-income countries confront the repercussions of climate change.
He added in an interview on the sidelines of the International Monetary Fund and World Bank meetings currently underway in Washington, “We formally requested to be considered among the beneficiaries of this facility.”
The IMF had agreed to provide a rescue package worth $7 billion to Pakistan, with the possibility of obtaining additional financing from the Resilience and Sustainability Fund.
The Resilience and Sustainability Fund is a financing instrument launched by the International Monetary Fund in 2022 with the aim of supporting member states in confronting long-term challenges such as climate change and economic transformations that require sustainable structural reforms. The fund aims to provide concessional financing to low- and middle-income countries that need support to build more resilient and sustainable economies.
The Fund provides loans on concessional terms to finance projects that promote long-term economic stability, focusing on issues such as climate change adaptation, energy transitions, and natural disaster management. The Fund is financed through contributions from IMF member states.
“I think we are good candidates for funding from the Fund,” Aurangzeb said.
According to the Climate Risk Index, Pakistan, located in South Asia, is one of the countries most vulnerable to the effects of climate change.
Floods in 2022, which scientists have linked to global warming, affected at least 33 million people and killed more than 1,700 people. The country’s difficult economic conditions and high debts also posed an obstacle to its ability to deal with this disaster.
Aurangzeb said that Pakistan was in talks with banks in the Middle East regarding commercial loans, and that one of them had made a “relatively large offer.”
He added that Pakistan’s foreign currency reserves are expected to reach $13 billion by the end of March, which will help in obtaining business loans and may improve its credit rating.
The central bank said that foreign currency reserves amounted to $11.04 billion in the week ending October 18.
