ISLAMABAD, March 20: The International Finance Corporation (IFC) plans to offer $1 billion new lending to Pakistan's private sector to further promote its telecommunications sector and help meet the growing energy requirements of the country.
Informed sources told Dawn on Tuesday that the IFC, a member of the World Bank Group, has also identified tourism, health and infrastructure as new sectors which will be provided increased lending during 2007 and onward.
The corporation would increase the current level of its assistance from $400 million to $1 billion, beside helping attract Foreign Direct Investment (FDI) in the country, particularly from the Middle East.
The executive vice president of IFC, Mr Lars Henrik Thunell, will arrive here on Wednesday to meet the president, the prime minister, his advisor on finance and other senior government officials to discuss the IFC's new plan to offer $1 billion lending to Pakistan's private sector.
Sources said during his meetings with senior Pakistani officials, the idea of supporting Pakistan's public-private sector business ventures will also come up for detailed discussion.
"So far, the IFC has provided loans to the private sector only, but now it can consider funding public-private joint ventures as well," said a source, adding the IFC was very much interested to enlarge its operations in Pakistan.It has, so far, offered $2 billion to the country's private sector.
Pakistan, he said, was a capital-constrained country, which needed to be extensively supported in the coming years.
The track record of Pakistan's private sector was very good in terms of timely paying back its loans to the IFC due to which it was decided to offer sizable new loaning to investors.
It was also learnt that the first-ever "mediation centre", being supported by the IFC is expected to be fully functional soon in Karachi to provide an effective and institutionalised dispute resolution mechanism to investors.
Initially, the centre being funded both financially and technically by the World Bank's private sector arm -- IFC, will focus on commercial cases and its activities will be limited to Karachi only as being the pilot project. But later it will be stretched to other cities as well.
The centre is being set up with the help of London-based "centre for effective dispute resolution" which is providing technical expertise to have a set of trained mediators in Pakistan for resolving disputes.
According to IFC officials, the centre would offer international standard mediation through a group of trained experts. This would be a real alternate dispute resolution forum which would facilitate the concerned parties and investors to sit down and settle their disputes without seeking the indulgence of courts.
"It is not an arbitration, but a mediation to encourage the investors to settle disputes peacefully and amicably", a source said.
The centre, he said, would work as a "neutral party" whose findings cannot be discussed or used as reference in the courts.
All the process will be conducted voluntarily, but if both sides are not convinced and do not reach any dispute-resolution mechanism, they can go back to litigation. "But both sides will be bound not to disclose the proceedings of the mediation in any court," he clarified.
This was how it was expected that the backlog of thousands of cases could be cleared. The IFC has provided $1 million for the training of judges and improving the processes of the courts.
The IFC's assistance to South Asian clients expanded this year to help expand capacity and develop new products and services. Infrastructure development where progress is critical to economic growth and quality of life is another focus of IFC's investment strategy, particularly in Pakistan, sources said.
"Our focus is key business lines where we have a competitive advantage," says a latest IFC document.
"We improve our standards for social and environmental performance of our investments and new policy to disclose more information and activities," it said.
This year, the IFC introduced, a new development outcome tracking system for investment operations to measure and track results throughout the life of a project.
