World bank delays approval of $1.1 billion loans for Pakistan: Source

The World Bank has delayed the approval of two loans for Pakistan worth $1.1 billion until the next fiscal year pending some steps on the country’s energy debt and tariffs, a finance ministry source told Reuters on Wednesday.

The approval of the loans have been pending since June, said the source, declining to be named as they were not authorised to talk to the media. Pakistan’s next fiscal year starts in July.

“The major issue is the circular debt management plan in the energy sector and tariff revision,” said the source. “These actions are pending on our side.”

The World Bank and the finance ministry did not immediately respond to requests for comment.

The South Asian nation of 220 million is still reeling from devastating floods that have led to losses of more than $30 billion. Foreign exchange reserves held by the State Bank of Pakistan fell to $4.3 billion earlier this month, barely enough for three weeks of imports.

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