Pakistan says IMF conditions for $1.2 billion tranche met

Islamabad: Pakistan has met the IMF's benchmarks for maintaining the status quo in the energy sector – in an outcome that may help to get the next loan tranche of USD 1.2 billion, officials said, ahead of the visit of the global lender's review mission to the cash-strapped country.

The Ministry of Energy officials said they have met the end-December targets related to containing the flow of circular debt below Pakistani Rs 385 billion, timely increase in the electricity prices, and slowing the increase in line losses, The Express Tribune newspaper reported.

The IMF would review the implementation of these targets during the loan negotiations under the second review of the $3 billion bailout package.

The IMF’s review mission might visit Islamabad by the end of this month or early next month, provided the government formation at the federal and provincial levels is complete.

Citing sources, the paper said that against the condition to restrict the flow of the circular debt to Pakistani Rs 385 billion by end-December, the increase was Pakistani Rs 378 billion, which was slightly better than the IMF requirement.

Pakistan has committed to the IMF that it would contain the circular debt at June 2023’s level of Pakistani Rs 2.31 trillion by the end of this fiscal year, the newspaper reported.

Recently, a top IMF official said it is looking forward to working with the new government in Islamabad while keeping mum on jailed former prime minister Imran Khan’s demand that the global lender should conduct an “audit” of the election results before approving any new loan for the cash-strapped country.

Pakistan is heavily dependent on the IMF and currently implementing a short-term USD 3 billion agreement. The global lender has already provided two tranches of loan and the last tranche of USD 1.2 is expected by the end of March or early April.

According to experts, the new government after taking office would have to enter into fresh talks with the IMF to get a new loan.

Earlier, the IMF’s review mission was scheduled to visit the country in the first week of February, but the delegation refused to visit on the eve of the general elections.