Business
IMF promises Pakistan ‘immediate’ release of $1.1bn loan after key meet
Cash-strapped Pakistan is poised to receive a $1.1bn loan tranche from the International Monetary Fund (IMF) after a key meeting of the international lender’s executive board on Monday, even as economists have warned that the country needs deep reforms to reduce its dependence on overseas financial assistance.
Late on Monday night, Pakistan’s Ministry of Finance and the IMF confirmed that the lender had approved the ‘immediate disbursement’ of a $1.1bn tranche that completes a total loan of $3bn agreed to under a deal inked last year.
But the approval came with firm words from the IMF. “To move Pakistan from stabilization to a strong and sustainable recovery the authorities need to continue their policy and reform efforts, including strict adherence to fiscal targets while protecting the vulnerable; a market-determined exchange rate to absorb external shocks; and broadening of structural reforms to support stronger and more inclusive growth,” the organisation said in a statement.
The bailout followed a meeting between Pakistani Prime Minister Shehbaz Sharif and IMF Managing Director Kristalina Georgieva, on the sidelines of the World Economic Forum meeting in Riyadh on Sunday.
Sharif’s government had sought a new IMF deal after the current $3bn standby arrangements (SBA) with the global lender expired on April 11.
Hours after the IMF approved the funding, Sharif on Tuesday said disbursement will bring increased economic stability to Pakistan. The bailout from the IMF proved important to save the country from default, the country’s state broadcaster quoted the prime minister as saying.
Pakistan has been reeling from a severe economic crisis for more than two years, with its inflation at one point shooting up to nearly 38 percent and its foreign currency reserves depleted to $3bn in February 2023, enough to cover less than five weeks of imports.
In June last year, Sharif was able to avoid a sovereign default when he secured the IMF bailout, pushing the current forex reserves to almost $8bn, according to the latest central bank data.
Khaqan Najeeb, a former adviser to the Finance Ministry, told Al Jazeera the performance of Pakistan’s $350bn economy in the past nine months has shown that the country’s meagre foreign reserves have increased and that inflation which was at 20 percent in March, has reduced, though slowly.
“Broadly, we can define Pakistan’s economic situation as macro-stabilisation, which is a consequent effect of adjustment policies, but it also means that growth is expected to remain slow and hover around 2 percent,” he said.
Leading Pakistani economist Kaiser Bengali, however, had reservations about the economic outlook as he questioned the sustainability of the current policies, wanting to see more structural reforms.
Bengali called the current economic indicators a “mirage”, adding that the perceived stability was due to the prospect of more loans coming in.
“If the so-called stability was due to a rise in exports or better inflow of dollars, that would have been meaningful but that is not happening. What we are seeing right now is a temporary situation, where the market is responding to day-to-day information,” he told Al Jazeera.
“The economy cannot run on merely an inflow of loans. How will we repay all our [existing] loans?”
Pakistan’s external debt obligations currently stand at more than $130bn, with Lahore-based economist Hina Shaikh fearing the current policy of using more debt to address fiscal deficit will create more inflation.
“Without a commitment to initiate reforms that rationalise expenditures and expand the tax net to increase tax revenues, the macroeconomic situation will not change much. Unless more goods are produced and there is real growth – that is exports see a boost, manufacturing takes place, there are productive employment opportunities – inflation will remain on the rise,” she told Al Jazeera.
Bengali said recent Pakistani governments had a single-point agenda of figuring out “where to get new loans to pay the past loans”.
“Public sector development has been left behind. In the last four decades, there has barely been any major project for health, education or housing,” he said.
Najeeb, the former government adviser, said the main challenge for the country in the coming days was to put together a framework that could result in growth “based on productivity and investment”.
“We must remember that Pakistan already owes them [IMF] $7bn,” he added.
Bengali signed off with a warning: Even the IMF could be reluctant to put in large sums of money to help Pakistan come out of its financial crisis.
“No bank will give you loans indefinitely, especially when they see a deteriorating balance sheet,” he said.
(Aljazeera)
By Ifham Nizam
A USD 57.4 million investment package is set to reshape the economics of electricity for small and medium-sized businesses, while creating a stronger platform for private investment in rooftop solar and other distributed renewable-energy projects.
The financing package—comprising a USD 35 million concessional loan from the Asian Development Bank (ADB), a EUR 15.4 million grant from the European Union (EU), equivalent to USD 16.94 million, and a USD 5.5 million grant from the Japan Fund for the Joint Crediting Mechanism (JFJCM)—will finance a five-year programme to modernise the electricity distribution system from 2026 to 2030.
For the business community, one of the most significant elements is the planned introduction of Virtual Net Metering (VNM), which will be implemented in the country for the first time.
The EU-funded component will support 25 MW of aggregated rooftop solar PV capacity, specifically aimed at helping reduce the electricity-bill burden of small and medium-scale entrepreneurs.
The move could open a new investment channel for SMEs that have traditionally faced difficulties in absorbing high energy costs and making the upfront investment required for renewable-energy systems.
Rather than viewing rooftop solar simply as a household energy solution, the programme positions distributed solar as an important business-cost management tool.
For SMEs, which operate with considerably tighter margins than many large corporates, electricity expenditure can have a direct impact on competitiveness, cash flow and the ability to expand operations.
By allowing electricity generated from qualifying rooftop solar installations to be applied through a virtual net-metering arrangement, the programme is expected to broaden the economic benefits of solar power beyond individual premises.
The financial significance of the scheme extends beyond the initial 25 MW.
By establishing the infrastructure and regulatory framework required to manage aggregated distributed generation, the project could help create greater investor confidence in the development of decentralised renewable-energy assets.
The investment therefore has the potential to leverage additional private capital into the renewable-energy sector rather than functioning solely as a government-funded infrastructure programme.
The financing package is particularly notable because a substantial portion comes in the form of grants and concessional funding, reducing the cost of financing technologies that would otherwise require significant upfront capital.
The ADB loan will support the wider modernisation programme, while the EU and Japanese grant components will help finance renewable-energy integration and technologies designed to strengthen the grid.
At EDL, the investment will upgrade the existing CEBAssist platform with Advanced Metering Infrastructure (AMI), a Distributed Energy Resource Management (DERM) system and distribution control centres supported by an Advanced Distribution Management System (ADMS).
These systems will give the utility real-time visibility of electricity consumption and distributed generation, allowing it to manage an increasingly decentralised power system more efficiently.
That digital infrastructure is critical to the business case for expanding rooftop solar.
As more SMEs and other consumers generate their own electricity, the distribution network needs to know where generation is taking place, how much electricity is entering the grid and how those flows are affecting local network conditions.
Renault has taken another significant step in its return to the Sri Lankan market with the opening of the Renault Experience Centre at Majestic City, Colombo, offering customers an opportunity to discover the brand and experience its latest models.
The Centre was officially declared open by Jawahar Ganesh, Group Managing Director of Associated Motorways (Private) Limited, accompanied by Prasanna de Silva, Director – Sales, AMW. The occasion was attended by AMW management and staff, members of the media, customers, well-wishers and other invited guests.
Located at the lobby of Majestic City, the Centre features three Renault models being introduced to the Sri Lankan market – the Renault Kwid, Renault Kiger and Renault Triber. Visitors can explore the vehicles, learn about their features and specifications, and take advantage of test drives available at the location.
Adding to the convenience for customers, AMW has ample stocks of Renault vehicles available in Sri Lanka, allowing customers to take delivery of their chosen vehicle without having to wait for months for it to arrive. Subject to completion of the necessary documentation and registration, customers can look forward to driving away in their new Renault within as little as one day, making the purchase experience faster and more convenient.
Customers can also enjoy greater peace of mind with a three-year manufacturer warranty, supported by dedicated Renault aftersales facilities to provide professional service and support throughout their ownership journey.
Commenting on the opening, Jawahar Ganesh, Group Managing Director of AMW, said, “We are delighted to welcome Renault back to Sri Lanka and to open the Renault Experience Centre at Majestic City. Renault is a brand with an exceptional heritage, a strong global presence and a reputation for innovation and distinctive automotive design. Through AMW, we are bringing that heritage and experience closer to Sri Lankan customers”.
Business
Dialog and Indira Cancer Trust continue breast cancer awareness initiative through Yeheli.lk
Dialog Axiata PLC, Sri Lanka’s #1 connectivity provider, marked the beginning of Breast Cancer Awareness Month by illuminating its Corporate Head Office in pink, in partnership with the Indira Cancer Trust, to stand in solidarity with individuals and families affected by breast cancer and encourage greater awareness, regular screening and early detection.
Building on previous breast cancer awareness campaigns conducted through Dialog’s Yeheli.lk platform in collaboration with the Indira Cancer Trust, this year’s initiative will continue throughout October under the theme, ‘A Pledge from the Heart’. As part of the campaign, members of the public can visit yeheli.lk to register for a free monthly SMS reminder and take their pledge for early detection throughout Breast Cancer Awareness Month.
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