ISLAMABAD: The Asian Development Bank (ADB) has signed a $20 million loan agreement with Pakistan to improve its corporate governance, technical capacity and regulatory framework of privatisation programme.
ADB Country Director Werner E. Liepach and Economic Affairs Division (EAD) Secretary Muhammad Saleem Sethi inked the agreement here on Tuesday.
The policy-based loan is part of the ADB country operations business plan (2014-16), and is in line with the interim country partnership strategy (2014-15).
The loan will help strengthen the government’s capacity to privatise and restructure its designated public sector enterprises (PSE).
In Pakistan, the processes to privatise PSEs have been established, but limited capacity exists to coordinate and undertake a programme of transactions in ways that ensure consistency and the best value for the respective assets.
The output of ADB assistance will ensure maximum levels of transparency, effective communication, strategic consistency, and compliance with labour safeguards.
ADB observes that many PSEs are in poor financial conditions and may not generate much market interest. Various forms of PSE restructuring is needed to bring these firms closer to sale, but upgrades in corporate governance practices are urgent.
The project seeks improvement of the governance and regulatory regime to ensure that efficiency gains in PSEs are in line with interest of the general public.