State Bank Of Pakistan extends scope of refinancing scheme
The State Bank of Pakistan (SBP) has enhanced the scope of its refinance scheme for renewable energy by allowing financing under category III of the scheme to solar and wind-based energy selling companies.
In a statement issued on Wednesday, the central bank said in light of the feedback received from stakeholders, the size of the project established by vendors, suppliers and energy sale companies has been enhanced from one megawatt to 5MW.
“Accordingly, the cumulative financing limit has also been increased from Rs1 billion to Rs2 billion,” it said.
The central bank emphasised that the revision in the scheme was expected to not only attract fresh local and foreign investment in the renewable energy sector but would also facilitate the production of clean energy in the country, helping to manage climate change.
The central bank had announced the financing scheme for renewable energy in June 2016, aimed at helping to address challenges of energy shortages and climate change in the country.
The scheme earlier comprised two categories. Category 1 allowed financing for setting up renewable energy projects with capacity ranging from 1 to 50MW for own use or sale to the national grid or a combination of both.
Category II allowed financing to domestic, agricultural, commercial and industrial borrowers for the installation of renewable energy-based projects and solutions of up to 1MW for generating electricity for their own use or sale to the grid or a distribution company under a net metering mechanism.
Later in July 2019, the SBP introduced Category III for facilitating financing to vendors and suppliers for the installation of wind and solar systems of up to 1MW, and also launched a Shariah-compliant version of the scheme in August 2019.
Since the introduction of the scheme, the total outstanding financing under the scheme has reached Rs15.6 billion for 217 projects having the potential of adding 292MW of energy supply.
Top posts in 126 government departments lying vacant
Despite directives from Prime Minister Imran Khan time and again, different ministries and divisions have failed to appoint heads of around 126 attached departments and organisations.
At present, 100 organisations are being run either through additional charges or acting charges whereas 26 have no acting heads.
In November last year, PM Imran had expressed dismay over the failure of ministries and divisions to meet the deadline of appointing heads of 135 organisations and departments, most of which are still being run on an ad hoc basis for more than a year.
In July last year, the prime minister had set a three-month deadline for appointing the heads of state organisations and departments. Despite the directives and setting of deadlines, so far 126 such units have no permanent head.
According to a report prepared by the Establishment Division, 126 positions of heads/CEOs/MDs in different organisations, under the administrative control of 26 ministries and divisions, had been identified as vacant.
As many as 26 organisations out of the total of 126 have been recommended for either merger into other organisations, liquidation, privatisation or winding up.
It was informed that at present administrative ministries and divisions had advertised 31 posts for appointing chief executive officers and managing directors of different organisations. It was also informed that six organisations were currently being run under the additional charge, four under current charge, 32 under look-after charge and 27 had no heads.
The Establishment Division had informed the cabinet, in a recent meeting chaired by the prime minister, that the cabinet in its meeting held on November 19, 2019 had directed all the ministries and divisions to prepare action plans and submit to the cabinet through the Establishment Division, indicating the minimum possible timelines for filling the vacant positions.
The Establishment Division had communicated the cabinet’s decision to the ministries and divisions with the request to comply without delay. The ministries were further requested to provide the updated status of vacant positions with clear action plans and timelines in line with the issued directives.
SMEs await latest policy announcement
Small and medium enterprises (SMEs) have urged the government to announce the long-awaited SME Policy amid the Covid-19 crisis as this is a crucial time for unveiling such policies.
On the demand of stakeholders, the government has decided to replace the SME Policy of 2007 with an updated version, encompassing all aspects of SME promotion and development in the SME Policy 2020.
“Prime Minister Imran Khan should take notice of the delay in announcement of the SME Policy 2020, which is ready but in doldrums for reasons best known to the Ministry of Industries,” said Union of Small and Medium Enterprises (Unisame) President Zulfikar Thaver.
“The simplest and the less expensive way is to revalidate the old policy of 2007 with a few modifications, wherever required,” he added.
“The government makes big claims but when has it really given incentive to the SMEs,” asked Muhammad Asim Anis, Convener of SME Committee of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), while talking to source.
“The new policy can solve many problems of the SME sector such as small loans on soft conditions by the State Bank of Pakistan (SBP),” he pointed out.
“In fact, the policy has become even more important due to the recent slump in the economy and devastation caused by Covid-19,” he stated. “The situation is so dire that small business owners have utilised their principal amount, let alone the profit they used to make.” The government should support the SMEs by going out of the way if it wanted to protect the sector, Anis said. “Prime Minister Imran Khan, in most of his speeches, has termed small businesses as the backbone of economy; this is the time for the government to show that it really cares about the sector and it is not just rhetoric.”
PC-Board approves transaction structures for five govt entities
The Privatisation Commission (PC) board on Wednesday approved transaction structures for five government entities but put off decision on the fate of Roosevelt Hotel due to backpedalling by stakeholders.
The PC board approved four transaction structures for the privatisation of House Building Finance Corporation (HBFC), First Women Bank Limited, Jinnah Convention Centre and Services Hotel Lahore. Headed by Privatisation Minister Mohammad Mian Soomro, the board also approved the divesting of 20 percent shares in the profitable Pakistan Reinsurance Company Limited.
The transaction structures will now be placed before the Cabinet Committee on Privatisation (CCOP) and subsequently before the federal cabinet for endorsement, according to a statement of the planning ministry. The board put off decision on divesting shares in blue-chip firms like Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL) and Mari Petroleum Limited. The board will meet next week again to discuss these transactions.
The meeting agenda showed that the Pakistan Tehreek-e-Insaf government did not have an immediate plan to get rid of loss-making power sector and other such entities.
At present, the Ministry of Privatisation is processing the divestment of 18 public sector enterprises (PSEs) but heavy loss-making entities are not part of the list. The board discussed the privatisation of Roosevelt Hotel, New York – an entity owned by Pakistan International Airlines Investment Limited (PIAIL) that was profitable till 2019.
ECC approves subsidy for housing project
In a first serious step towards fulfilling the promise of providing affordable homes, the federal government on Wednesday approved a Rs23.6-billion plan to facilitate low to medium-income groups in taking loans from banks at subsidised rates.
The Economic Coordination Committee (ECC) of the cabinet also approved a Rs4.7-billion supplementary grant – just 22 days after the start of new fiscal year – to share the cost of interest with borrowers.
The approval of supplementary grant after the budget was passed by the National Assembly last month once again exposed the ill-planning on the part of the government that did not know three weeks ago that it would need subsidies for the project.
With the approval of Rs4.7 billion in supplementary grant, the total budget outlay projection of Rs7.137 trillion has been breached in first month of the new fiscal year.
The ECC approved a 20-year loan tenor for three, five and 10-marla homes and a subsidy plan for 10 years. The government has approved Rs23.6 billion in subsidy for 10 years on financing needs of Rs100 billion on the basis of current Karachi Interbank Offered Rate (Kibor) at 6.89 percent. The subsidy will increase with any hike in interest rate by the central bank. Prime Minister Imran Khan had promised to build five million homes for the homeless people. His government took the first step in that regard towards the end of its second year in power.
Pakistan’s LSM sector shrinks 10.3pc in Jul-May fy20
The large industrial sector, which had been shrinking even before the deadly pandemic hit the economy, further contracted by 10.3 percent in first 11 months of the previous fiscal year, underscoring the need for a review of economic policies.
Large-scale manufacturing (LSM) output shrank 10.3 percent in July-May of fiscal year 2019-20 over the same time of previous year, the Pakistan Bureau of Statistics (PBS) reported on Tuesday. The LSM contracted by 24.8 percent in May alone over the same month a year ago, stated the national data-collecting agency.
PBS is the most important national data agency but the Pakistan Tehreek-e-Insaf (PTI) government has failed to appoint professionals to run its affairs. It is being run on an ad hoc basis by the Ministry of Planning and Development.
Many key posts, including that of chief statistician, who happens to be the in charge of the organisation, remain vacant.
On a month-on-month basis, the LSM posted a positive growth of 20.5 percent in May 2020 over April due to better output in fertiliser and pharmaceutical sectors. But almost all the other big industries faced contraction on a monthly basis too.
The respiratory disease, Covid-19, had started impacting Pakistan’s economy from the third week of March this year. But large industries had been struggling even before the pandemic hit the economy.
The LSM sector has been shrinking since the start of fiscal year 2019-20, which began in July 2019, due to double-digit interest rate, currency depreciation resulting in a high cost of inputs, higher taxes and increase in electricity and gas prices.
After the spread of the disease, the government has conveniently thrown the responsibility on to Covid-19 instead of correcting its economic policies. Pakistan is de-industrialising with the manufacturing sector’s contribution to the gross domestic product (GDP) declining every year. PBS data showed that out of 15 major industries, being assessed by the PBS, only three recorded some growth while output in 12 industries shrank in July-May of fiscal year 2019-20.
Omar promises support to importers
The Ministry of National Food Security and Research would help wheat importers at all levels, declared Federal Food Security Secretary Omar Hamid.
Chairing a meeting on wheat import on Wednesday, Hamid assured the importers of positive steps by the government in response to their requests for facilitation and timely decision-making so the country could receive wheat consignments on time.
He emphasised that legitimate concerns of the importers should be addressed at the earliest. “The government is subsidising wheat import so that people can get the commodity at affordable prices,” he said.
In view of the current supply issues during the harvesting season, the federal government has decided to import wheat to ensure uninterrupted supply. Importers have requested for facilitation in berthing, storage and clearance of shipments.
The meeting was attended by wheat importers, representatives of the food ministry, Federal Board of Revenue and Finance Division.
The Ministry of National Food Security and Research issued wheat import permits to private sector importers a few days ago in a bid to ensure adequate and timely import of the commodity aimed at a smooth demand and supply of the grain and flour across the country.