Cash-strapped Pakistan, staring at a major economic crisis with mounting inflation and yawning fiscal deficit, will soon receive $250 million in loans from the Islamic Development Bank (IDB) which has cleared two proposals for loans to be used for dam construction in Pakistan and vaccine procurements. The IDB on Monday signed an agreement with the Pakistan government for $72.5 million for the purchase of vaccines. 

The development came after last week’s extraordinary session of OIC (Organisation of Islamic Cooperation) foreign ministers, held in Pakistan and was also attended by IDB’s President Muhammad Al-Jasser. He also held discussions with Pakistan’s Economic Minister Omar Ayub Khan. 

The loan will finance the construction of a dam in Mohmand, a tribal agency in the country’s mountainous northwestern region. It will also support Pakistan’s nationwide vaccination efforts in the face of the ongoing Covid-19 pandemic.

Under this approval, the country’s IVAC Covid-19 Vaccine Support Project – also co-funded by the World Bank and the Asian Development Bank - will receive $70 million from IDB as well as $2.5 million from IDB’s Islamic Solidarity Fund for Development (ISFD), reported The Express Tribune.

This comes in the framework of the second track (R2) of IDB Group’s $4.56 billion Strategic Preparedness and Response Programme (SPRP), specifically designed to support member countries with their health and economic recovery program against the Covid-19 pandemic.

(SAM)