Government Initiates Activation of $1.5 Billion Uplift Fund

ISLAMABAD: The interim government aims to kick-start the operations of the Pakistan Development Fund Ltd (PDFL), a $1.5 billion state-owned entity, to offer an alternative financing avenue for public sector development projects. This involves divesting government stakes in public sector enterprises and engaging in public-private partnerships (PPP).

Established in June 2014 with a financial injection of $1.5 billion from Saudi Arabia to address foreign exchange challenges, PDFL has remained dormant under the Ministry of Finance for nearly a decade. Despite being a public limited company led by the Ministry of Finance, it was also granted non-banking financing company (NBFC) status to facilitate innovative financing sources for development projects.

The government now aims to activate PDFL by appointing a chief executive officer (CEO) to lead the entity into formal operations and attract foreign investment, particularly from friendly nations, for high-value projects and businesses in Pakistan. The CEO will be hired initially for three years, with the possibility of extension, to develop and implement PDFL's corporate strategy, business plan, and operational strategies.

The finance ministry anticipates completing the CEO hiring process before the caretaker government transitions power to the elected government. This will enable the entity to commence operations promptly, serving as a platform for international lenders, the private sector, and other stakeholders to streamline initiatives related to infrastructure financing and public-private partnerships.

The CEO will be responsible for engaging with multilateral and bilateral agencies, export credit agencies, local and foreign financiers, and investors. Additionally, they will oversee the management and administration of business assets and services, tapping into various funding sources.

The government has recently issued guidelines on Fiscal Commitments and Contingent Liabilities (FCCL) for federal PPP projects to enhance the quality and cost-effectiveness of public infrastructure. The FCCL guidelines focus on managing long-term fiscal costs in PPPs, providing clarity on the financial picture, and ensuring fiscal sustainability for sustainable implementation of infrastructure projects. The objective is to optimize private sector participation while achieving long-term infrastructure development goals.

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