ECC allows issuing Eurobonds worth $500m

ISLAMABAD-The Economic Coordination Committee (ECC) of the Cabinet on Thursday has approved to issue Eurobonds worth of $500 million to arrange to finance for much needed Diamer Basha and Mohmand Dams.

Federal Minister for Finance and Revenue Dr Abdul Hafeez Sheikh chaired the meeting of the ECC. Ministry of Water Resources presented a summary for issuance of WAPDA’s debut $500 million Eurobonds to arrange finances for Diamer Basha and Mohmand Dams. 

The ECC approved the issuance of $500 million Eurobonds in principle and directed to work out modalities in consultation with the Finance Division and the State Bank of Pakistan. 

WAPDA needs around $2 billion in foreign financings for the two mega-dams. Initially, WAPDA plans to issue Eurobonds to generate $500 million to meet the foreign funding component under the innovative financing strategy.  WAPDA had already awarded contracts for Diamer-Basha dam for Rs442 billion and Mohamand Dam at Rs310 billion to two separate consortiums of Chinese and Pakistani firms. Ministry of Planning, Development and Special Initiatives presented a detailed presentation on Karachi Transformation Plan (KTP) before ECC. 

The forum discussed the plan thoroughly and endorsed, in principle, with the direction to secure approval from all relevant quarters before submission to Cabinet. 

The Chair directed to follow all codal formalities concerning various components of KTP. Ministry of Maritime Affairs presented amendments in the Master Plan, originally formulated in 2001, regarding the establishment of 5 terminals on BOT Basis. 

These terminals would fulfil increased demand for container handling capacity. The ECC approved amendments in the Master Plan for establishing 5 terminals including two LNG terminals, two multipurpose cargo terminals and one integrated container terminal on a BOT basis. A detailed summary was placed before ECC by the Ministry of Energy (Petroleum Division) regarding shelving the LNG Air Mix Projects by Sui companies. 

After deliberation, the ECC decided that SNGPL may abandon the three projects namely Drosh, Ayun and Chitral Town and dispose of the land and equipment with minimal loss possible through an open transparent process. Ministry of Energy also presented a summary regarding repayment of GHPL loan and future funding requirements for expenditure concerning ISGSL gas import and infrastructure projects. 

GHPL had funded all the expenses of ISGSL through the medium-term loan as per ECC’s earlier decision dated 15 December 2016. Various proposals were presented before the forum. The ECC approved the proposals in principle subject to clearance by the High Power Board. 

The ECC also approved the summary by the Ministry of Industries and Production regarding duty and tax-free import of cryogenic oxygen tanks for better handling of  COVID-19 situation. The duty-free import of cryogenic tanks would ensure uninterrupted supply of oxygen gas at competitive rates.  

ECC also approved the change in the shareholding structure of the Pakistan Credit Guarantee Company (PCGC). According to the new structure, the shareholding of the Government of Pakistan in the Company has been reduced to 49 per cent from the earlier 70 per cent. 

Any dividends announced by PCGC against shares held by the State Bank of Pakistan or any proceeds from the sale of shares in PCGC, held by the SBP, shall be remitted in the Government treasury.

The Following Technical supplementary grants were approved by the ECC; amount to the tune of Rs757.100 million was approved for the completion of different projects under the Sustainable Goals Achievement Program (SAP). As many as Rs500 million were approved for the reimbursement of the fee for less developed areas as requested by the Higher Education Commission.  

Meanwhile, Rs500 million for the Ministry of Housing and Works to provide interest-free loans to borrowers under the Prime Minister’s Low-Cost Housing Scheme. Similarly, Rs4,189 million for the execution of development schemes for Sindh and Balochistan provinces under PSDP being executed by the Ministry of Housing and Works/Pak PWD. 

Similarly, Rs327 million were approved for Auditor General of Pakistan to sustain the World Bank’s public financial management and accountability service delivery project during FY 2020-21.