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HomeIndiaPakistan must improve infrastructure spending fivefold: Maheen Rehman - PakistanNews WAALI

Pakistan must improve infrastructure spending fivefold: Maheen Rehman – PakistanNews WAALI

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InfraZamin CEO Maheen Rehman said in a discussion on Tuesday that despite a huge population of 220 million, Pakistan has been spending less than 2% of its GDP on developing its infrastructure when it should be spending around 10%.

He highlighted the need for rigorous development in the fields of education, health and agriculture.

InfraZamin collaborated with Nutshell Group to jointly host this Infrastructure Summit at a local hotel.

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“The purpose of this summit was to highlight the debt financing opportunities and the exceptional work that the Private Infrastructure Development Group and GuarantCo have already done as a model for Pakistan to emulate and benefit from.

“InfraZamin is in a good position with its ability to show good ideas to the industry of the future,” he added.

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InfraZamin Pakistan’s partners include International Finance Corporation (IFC), UK Aid, Infraco Asia, PIDG and GuarantCo.

Climate resilient infrastructure

Meanwhile, GuarantCo CEO Layth Al-Falaki said, “development now means climate resilience and Pakistan, as a frontline state for the climate crisis, needs to incorporate the SDGs into its vision. Now is the right time to invest in climate resilient projects to rebuild infrastructure in the country.”

Infrastructure Summit to be held in Karachi today

He said that Pakistan has immense potential and the country should not lose hope because of the ongoing crisis in the country.

Jo Moir, Director of Development at the British High Commission’s Islamabad Commonwealth Office of Foreign Affairs and Development said, “due to Pakistan’s severe climate vulnerability, we believe in not only providing the right infrastructure for climate resilience but also assisting in the transition to decarbonisation .”

She also appreciated the incredible initiatives taken by Federal Minister for Climate Change Sherry Rehman.

State Bank of Pakistan (SBP) Governor Jameel Ahmad added the green economy tangent by elaborating on SBP’s sustainable initiatives and said “on behalf of the bank, I assure you that we will continue to promote sustainable infrastructure financing and facilitate the financial institutions .”

Speaking about the catastrophic floods in Pakistan, Ahmad pointed out that the country needs $16 billion to overcome the destruction. Apart from post-flood rehabilitation and development, the country also needs economic viability for health, food, water and agriculture.

He further said that the investment opportunities in Pakistan are very limited, while the need for investment is much more.

“Measures to promote a climate resilient economy will be the game changers and many banks have already started green banking guidelines,” he said?

Problems with financing infrastructure in Pakistan

Talking about commercial banks, Punjab Bank President and CEO Zafar Masud said, “there is a serious problem of asset liability as only 1.2% of the total deposits are beyond five years.”

“If we project a 10-year GDP for Pakistan, the requirement is around Rs5 trillion per year for infrastructure financing, which is not possible through the current funding pot.”

Talking about the challenges, Pakistan Stock Exchange CEO Farrukh H Khan said that the basic challenge is the current practice of banks investing in bonds and holding onto them for long periods of time.”

IFC’s Chief Country Officer Pakistan Naz Khan said, “IFC’s current portfolio in Pakistan is close to $1.3 billion and we are looking to increase to almost double in the next 3 years.”

He also spoke about the necessary paradigm shift where ownership of infrastructure needs to come from private equity.

K-Electric CEO Syed Moonis Abdullah Alvi said that privatization of the power sector in Pakistan is the only solution to get rid of the Rs3 trillion revolving debt.

The Chairman of the PSX, Dr Shamshad Akhtar, said that Pakistan’s fiscal constraints limited public investment in infrastructure which made it critical for us to attract private funding. She expressed her desire to see an infrastructure bank in Pakistan.

“It is important to recognize that InfraZamin and PIDG have the power to leverage long-term infrastructure funding from domestic and foreign investors,” he said.

Akif Saeed, Chairman of Securities and Exchange Commission of Pakistan said, “we need to have a dialogue between different stakeholders to have an integrated approach towards infrastructure development and SECP will work hand in hand with InfraZamin to achieve this goal for Pakistan.”