Peshawar    -   Khyber Pakhtunkhwa Minister for Finance Taimur Jhagra, while retaliating against opposition statements regarding exaggerated figures of KP debt, has said that the Khyber Pakhtunkhwa’s Disbursed Loan Liability on 30th June 2022 is Rs 331 billion as reflected in Debt Statistical Bulletin on page 23.

He said that there is no domestic debt liability against the provincial government as of 1st July 2022. He added that foreign currency is used for the financing of specified developmental projects under an agreement between government of Khyber Pakhtunkhwa and federal government. He said that the re-lending terms and conditions of the foreign loans to the provincial government are the same as those agreed upon by the federal government with foreign lenders.

He reiterated that the loans borrowed are long-term concessional loans for which interest rates range from 0.75 to 2percent for development projects and programs. “The tenor of these loans is between 20 to 25 years with grace periods of 5 to 10 years. During the grace period, only interest is charged, whereas there are no principal repayments,” he explained.

Referring to the return of loans, KP finance minister   told that during the current financial year 2021-22, the government of Khyber Pakhtunkhwa has repaid Rs 12.155 billion on account of principal repayments and paid Interest of Rs 2.5 billion. Most of these loans are taken for various sectors including transport, energy and power, urban and rural development, roads infrastructure, health, and education.

“The ratio of outstanding debt stock as a percentage of total receipts is only 44 percent, whereas the ratio of debt servicing (repayment) to total receipts is only 2.01percent reflected on page 93 of White Paper 2022-23,” Taimur Jhagra added.

However, Jhagra elaborated that an amount of Rs 556.666 billion has been shown as ‘Undisbursed Amount’ in Debt Statistical Bulletin as of 31st December 2021, page 11. These are committed loan amounts on account of 23 Active Loans, meaning that the loan agreements for these projects are already signed, and the loan amount is expected to be received/disbursed in the next 5-7 years.