PESHAWAR: The government of Khyber Pakhtunkhwa (KP) has taken loans totaling Rs148 billion from various international financial institutions, including the Asian Development Bank (ADB) and the World Bank over the past fiscal year (2023-24).
This has pushed the province’s total foreign debt to Rs680 billion, according to the latest debt management report from the KP finance department.
The report revealed that the provincial government has accumulated a total of 107 foreign loans from agencies like the ADB and the International Development Association (IDA), a division of the World Bank. Of these, 32 loans remain active, while 75 have closed, with repayments already in progress to the foreign lenders.
During the past year alone, the KP government repaid Rs38 billion in foreign debt. In the current fiscal year’s (2024-25) budget, it has allocated Rs67 billion for further repayments.
Among recent loans, the KP government borrowed Rs22 billion from the ADB for a food security support project. The province has taken a total of 49 loans from the ADB, including Rs128 billion for the Peshawar Bus Rapid Transit (BRT) project.
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The World Bank’s IDA has also provided a series of loans totaling 44 projects, including Rs52 billion for Development Policy Credits I and II, Rs27 billion for the Revenue Mobilization and Public Service Project, Rs36 billion for irrigation and agriculture initiatives, Rs12 billion for the Khyber Pakhtunkhwa Hydropower Project, and Rs27 billion to improve departmental efficiency.
The ADB loans also fund various infrastructure projects, including Rs30 billion for provincial road improvement, Rs17 billion in additional financing for the Mardan-Swabi Dual Road Project, and Rs22 billion for a city improvement initiative.
KP’s provincial adviser on finance Muzammil Aslam said that a debt management fund has been established to enhance foreign debt management. He said that the province has declined four new loan offers in a bid to stabilize its debt portfolio.