Loan of $335 Million Secured by Pakistan for Vaccines

The government of Pakistan is currently in the process of negotiating with several multilateral institutions to secure a loan of $335 million. The country is in need of funds to procure vaccines for the coronavirus. However, these institutions have made it clear that authorities cannot use this loan to buy vaccines manufactured in China. 

The relevant authorities have approached the Asian Development Bank, as well as the World Bank for this loan, as revealed by the officials of the Ministry of Economic Affairs.

A special request has been made to the ADB to provide Pakistan with a loan of $200 million from the $500 million that it previously set out to give to the country in order for it to procure the required vaccines. 

In addition, the government of Pakistan has been successful in negotiating a loan of $135 million that will be diverted from a troubled project of $200 million from the Washington-based lender. 

In November of last year, the WB had halted the implementation of its $200 million mitigation project that it started for the coronavirus. The reason behind this was because the federal and provincial authorities had not been able to put ineffective mechanisms to strengthen the health systems.

The project had initially been set in motion to help bridge the capacity gaps. Thus, consumables and equipment had been bought for around 200 hospitals, which included 44 hospitals that fall in the tertiary category. Filling in the capacity gaps was deemed as vital to effectively and clinically manage the confirmed cases.  

However, both banks specified that their loans cannot be used by Pakistan to procure any vaccines manufactured in China. So far, sources have revealed that the vaccines being used in the country are the ones it received from its neighbor. Moreover, it was added that the Chinese vaccines are not financially eligible for the criteria that have been outlined by the WB and ADB, both. 

Three key takeaways have been extracted from the guidelines provided by the two banks. First, the vaccines should be chosen through the Covax program, which is being funded by Gavi. It should also have received approval from the World Health Organization and authorization from the regulatory authorities in Europe. 

The three vaccines of Chinese origin, which are Sinopharm, Sinovac, and CanSino, have been deemed ineligible for the funding. Sinovac recently announced that it is making efforts to become a part of Covax, however, no proper timeline has been provided as yet. 

The Federal Minister for Planning and the Chairman of the Vaccine Procurement Committee, Asad Umar, has announced that Pakistan is currently having discussions with the WHO regarding the exclusion of vaccines manufactured in China, from the financing criteria. 

The Minister added that the authorities are concerned about the availability of vaccines, rather than the financing. He added that the Federal Cabinet has given its approval for $150 million for the procurement of vaccines. $90 million from this amount will be provided by the Islamic Development Bank.