China-led AIIB likely to invest in development projects in cash-strapped Pakistan

Cash-strapped Pakistan is likely to receive investments for development projects, including roads and sewerage plants, worth USD 1.4 billion by the China-led Asian Infrastructure Investment Bank (AIIB), according to a media report. The Beijing-based AIIB is considering investment in the Karachi Bus Rapid Transit (BRT) project, Rawalpindi’s Ring Road project, Lahore Waste Water Management project and Karachi Water and Sewerage Service project among others, the Express Tribune reported on Friday.

"Work on projects amounting to USD 4 million is in progress while projects worth USD 1 billion are awaiting approval, Laurel Ostfield, AIIB head of communications, said on Thursday. Last month, Pakistan said that Saudi Arabia headquartered Islamic Development Bank was providing it a three-year USD 4.5 billion oil financing facility, which will ease pressure on its balance-of-payments.

Pakistan is also negotiating a USD 8 billion bailout package from the International Monetary Fund (IMF) to overcome a severe balance-of-payments crisis that threatens to cripple the country's economy. The government reached out to some "friendly countries" for economic assistance including Saudi Arabia, China and the UAE since Prime Minister Imran Khan assumed office in August last year and has received financial help to a great extent.

Pakistan's close ally China is already building the USD 50 billion China-Pakistan Economic Corridor. Launched in 2015, CPEC is a planned network of roads, railways and energy projects linking China's resource-rich Xinjiang Uyghur Autonomous Region with Pakistan's strategic Gwadar Port on the Arabian Sea.

Ostfield said the AIIB desired to launch even more development projects in Pakistan in the future. Currently, the AIIB is considering investing in the USD 100-million Karachi Bus Rapid Transit project, she said. Ostfield said that Asia needs connectivity and investment from the private sector and the AIIB, for the first time, is presenting its report in Pakistan. “We are focusing on eight markets including Pakistan,” she said, adding the AIIB runs the projects on merit without any discrimination among member states.

“No economy can develop without making investment in infrastructure,” Ostfield stated. Noting that AIIB was also looking into projects related to renewable energy, she said : "Pakistan holds an immense potential in power produced from hydel sources. Pakistan incurs a higher cost on road construction." “We must have our focus on environment-friendly projects,” she said. She said strong infrastructure and cross-border mobility were among top priorities of the Asian infrastructure bank.

(With inputs from agencies.)