According to the Finance Ministry, Federal Finance Minister Muhammad Aurangzeb met representatives of financial advisory firm Alvarez & Marcel on the sidelines of the World Bank and IMF annual meetings in Bangkok. The discussions focused on the possibility of combining the World Bank’s Policy Based Guarantee and the Multilateral Investment Guarantee Agency (MEGA) facility.
Through the proposed structure, Pakistan will seek to provide financial resources to investors on relatively competitive terms. According to officials, the potential amount could be about $1.5 billion, but it will depend on the available guarantee capacity and the final financial structure.
The Finance Minister suggested that instead of initiating negotiations on a new framework, the existing Development Policy Operation be used so that there is no unnecessary delay in the implementation. The Ministry of Finance, Economic Affairs Division and the World Bank Group will have to work further on this proposal.
This type of financing could be important for Pakistan, as guarantees can help reduce lenders’ risks and secure better terms. However, the proposed facility is still under consideration and should not be considered a final sanctioned amount or a completed contract.
