Flood project: Pakistan govt seeks $31m financing boost from World Bank
ISLAMABAD: The government of Pakistan has requested the World Bank for increasing the financing envelope by $31 million as well as restructuring of Integrated Flood Resilience and Adaptation Project.
The request was made to better align the project with current implementation capacity, performance of the component and operational their readiness, and a stronger focus on resilience. Official sources revealed that the request was based on series of discussions from between senior management of the World Bank, government of Pakistan, and government of Balochistan.
The project development objective (PDO) is to improve livelihoods and essential services and enhance flood risk protection in selected communities affected by the 2022 floods.
World Bank rates IFRAP implementation as 'moderately unsatisfactory'
The proposed additional financing of $31 million and reallocation of US$54 million from other components will support activities under Component 3 of the Parent Project which will increase impact and expand the provision of multi-hazard resilient housing units and livelihoods in Balochistan. The AF will facilitate increasing funding for the housing subsidy grant to 102,000 beneficiaries from the current 35,100.
The Additional Financing (AF) aims to scale up housing reconstruction activities in Balochistan Province, covering additional eligible beneficiaries whose homes were affected by the 2022 floods. The affected households were initially identified through the damage assessment conducted by the Government of Balochistan (GoB) and subsequently by the implementing partners of the Project.
The AF also includes a Level 2 Restructuring, which reduces the scope of activities under Components 1 and 4 of the Project. It also modifies the Results Framework (RF) to update indicators and targets, including the addition of a relevant World Bank Group Corporate Scorecard FY24–30 indicator.
The restructuring does not include any new types of activities, and the Project Development Objective (PDO) remains unchanged. With this AF, the total Project commitment will increase to US$244 million. The need for AF was identified during the implementation of IFRAP. Balochistan was among the provinces most severely affected by the 2022 floods. The Post-Disaster Needs Assessment estimated damage to the housing sector in Balochistan at over $400 million. To address this challenge, the Parent Project was initiated with $75 million equivalent IDA credit for housing reconstruction. However, a significant financing gap remains to fully rehabilitate the damaged housing units in the province.
The revised project description is as follows: 12. Component 1 – Community Infrastructure Rehabilitation. This component will finance the rehabilitation of priority community infrastructure damaged by floods, including irrigation and flood protection infrastructure, roads and bridges located in calamity-declared districts of Balochistan. The guiding principle is to build back better with improved infrastructure based on climate risks, improved engineering design standards, and improved construction and maintenance to enhance resilience. The component will also include the technical assistance needed for the design and supervision of the works and for the development of operation and maintenance of the infrastructure. 13. Component 2: Strengthening Hydromet and Climate Services. This component will enhance the PMD capacity to generate and use hydrometeorological information for decision-making, particularly by expanding coverage in the western region, benefiting Balochistan as well as other parts of the country. While financing remains unchanged, cost escalations have reduced the number of Automatic Weather Stations (AWS) from 300 to 110. To ensure sustainability and impact, deployment will prioritize high-risk areas such as flash flood-prone regions in South Punjab and Sindh, aligning with PMD's operational capacity. 14. Component 3: Resilient Housing Reconstruction and Restoration. This component will finance: (i) resilient housing reconstruction grants to beneficiaries for the reconstruction of core housing units damaged by floods; and (ii) institutional strengthening and technical assistance for the reconstruction. It will also support the objective of improved livelihoods generation in the construction sector and allied subsectors. 15. Component 4: Project Management, Technical Assistance, and Institutional Strengthening. This component will support: (i) project management for the FPMU and the provincial PIUs; (ii) technical assistance for M&E, Project Supervision and Implementation Assistance (PSIA), preparation of SoP2, and preparation of community flood resilience plans; and (iii) institutional strengthening through capacity building and drafting a Water Act. 16. Component 5: Contingent Emergency Response. This component facilitates the provision of immediate response to an Eligible Crisis or Emergency, as needed. Following an adverse natural event that causes a major disaster or emergency, the GoP may request the Bank to reallocate project funds to support response and reconstruction. Resources will be allocated to this component as needed during implementation. 17. Results Framework. There are no changes to the PDO. The RF has been updated in line with the revised project design. The indicator 'people with enhanced protection to flood risk' is revised to align with the corporate scorecard indicator 'people with enhanced resilience to climate risks', including its sub-indicators reporting on youth and women.
Copyright Business Recorder, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
3 hours ago
- Business Recorder
Australian shares head for sixth straight half-yearly rise
Australian shares were headed for their sixth straight half-yearly rise on Monday, driven by easing geopolitical and trade tensions and hopes of rate cuts by the local central bank. The S&P/ASX 200 index rose 0.2% to 8,530.60 points by 0023 GMT. The benchmark was on track to rise 4.5% for the first half of 2025. Domestic equities recouped from a trough hit in early April as easing US-China trade tensions and an Israel-Iran ceasefire boosted risk appetite. Gold stocks were poised to soar more than 35% in the first six months of 2025, in what could be its best half-year since 2016's first half, as geopolitical tensions and tariff worries drove safe-haven demand. However, the sub-index fell 1% on the day as bullion prices eased. Energy stocks, which fell 0.7%, were highly volatile in the half-year as the Israel-Iran conflict fuelled oil supply concerns. The sub-index was largely unchanged for the half year. Meanwhile, miners retreated 1.3% after surging more than 2% on Friday. Australian shares wipe out early gains as banks drag Further leading the benchmark higher were prospects of rate cuts by the Reserve Bank of Australia (RBA) as domestic inflation eased. Swaps implied a 92% probability that the RBA would cut rates by a quarter-point at its upcoming policy meeting on July 8. Local investors awaited the retail sales data for May due on Wednesday for further clues into rate cuts. Financials rose 0.7%, with the 'Big Four' gaining between 0.3% and 0.8%. The sub-index was on track to jump more than 10% for the half-year. In company news, Star Entertainment said it received a notice from Hong Kong's Far East Consortium International and Chow Tai Fook Enterprises to terminate the deal to sell its 50% stake in its Queen's Wharf project in Brisbane. However, shares rose 1.7%. New Zealand's benchmark S&P/NZX 50 index was largely unchanged at 12,580.56 and was set for its worst half-year since the first half of 2022.
Business Recorder
7 hours ago
- Business Recorder
Trump tells Fox News he has group of wealthy people to buy TikTok
WASHINGTON: US President Donald Trump said in a Fox News interview broadcast on Sunday that he had found a buyer for the TikTok short-video app, which he described as a group of 'very wealthy people' whose identities he will reveal in about two weeks. Trump made the remarks in an interview on Fox News' 'Sunday Morning Futures with Maria Bartiromo' program. He said the deal he is developing would probably need China's approval to move forward and he predicted Chinese President Xi Jinping would likely approve it. The US president earlier this month had extended to September 17 a deadline for China-based ByteDance to divest the US assets of TikTok despite a law that mandated a sale or shutdown without significant progress. A deal had been in the works this spring that would have spun off TikTok's US operations into a new US-based firm, majority-owned and operated by US investors, but it was put on hold after China indicated it would not approve it following Trump's announcements of steep tariffs on Chinese goods. 'We have a buyer for TikTok, by the way,' Trump said. 'I think I'll need probably China's approval. I think President Xi will probably do it.' A 2024 US law required TikTok to stop operating by January 19 unless ByteDance had completed divesting the app's US assets or demonstrated significant progress toward a sale. Trump, who credits the app with boosting his support among young voters in last November's presidential election, has extended the deadline three times.
Business Recorder
7 hours ago
- Business Recorder
Will low reserves be the new normal?
EDITORIAL: That the economy is stuck in a low-growth trap is a fact. Imports are already inching up without being accompanied by a robust growth momentum. Traditionally, import pressure has been felt when growth reached over four percent; however, now after two years of stabilisation at 2-3 percent growth, a stress is already visible in the interbank market. The issue is that the economy's size is growing, as nominal GDP has increased from US$ 311 billion in FY16 to US$ 410 billion in FY25. However, SBP forex reserves today stand at US$10-12 billion compared to US$18 billion in FY16. Commodity prices, even after declining from their super cycle peak, remain higher than their FY16-18 levels. Low reserves combined with relatively higher commodity prices have created a new normal that coupled with a rising consumption demand from a young and growing population traps the economy in a cycle of low growth. The key question is why reserves are not increasing and why external funding has dried up, despite the country continuously being in IMF programmes and receiving praise from the Fund for its progress and reform commitments. Moreover, why are bilateral and market-based inflows scarce, even though international rating agencies have upgraded the country's ratings? Why is the country stuck in repeated rollovers? Recently, China approved only half of its committed funding. Other bilateral partners are merely rolling over existing loans. Commercial loans remain expensive, despite improved ratings. The finance minister has yet to start attracting capital from Chinese markets via panda bonds, and there are no discussions about issuing new Eurobonds or sukuk. No fresh loans appear imminent. Currently, the government has only empty promises for investment. At best, it can secure sovereign loans by improving perceived sovereignty internationally. Investment should ideally come from the private sector, but when local investors themselves are looking to take capital out of the country, it is unrealistic to expect foreign investors to show interest. The drain on the financial account continues, and some loans might not roll over, while capital account inflows (FDI) remain insufficient to bridge the gap. Consequently, the current account must remain balanced — if not in surplus — during FY26. Remittances cannot grow significantly, given their large existing base, and exports have limited upside potential. Conversely, import pressure is building. At current growth levels of 2-3 percent, imports are already difficult to manage. With the national tariff rationalisation policy in action, reductions in import duties are likely to drive even higher imports, thus making demand management critical. The currency is the first line of defence. The SBP has accelerated currency depreciation from five paisas a day to 15 paisas a day, with PKR/USD currently hovering around 284. The currency needs to adjust further until imports are brought under control, which implies little room remains for additional interest rate cuts. Another concern is that currency depreciation will reignite inflation expectations because fuel and energy costs are pegged to the US dollar and the interest payments on government's external debt would increase. Any corresponding increase in exports as a result of currency depreciation would at best be marginal to begin with. Thus the fragile macroeconomic recovery faces premature challenges as these trends likely to persist in FY26 as well. Copyright Business Recorder, 2025
