By Muskan Naveed ISLAMABAD, Jan. 20 (INP-WealthPK): The next tranche of the Extended Fund Facility (EFF) of the International Monetary Fund (IMF) is for $1 billion; however, there may be more at stake than that. While speaking to WealthPK, Director to Minister of Economic Affairs Saeed Chaudhry identified an additional $1 billion conditional on the successful release of the next tranche of IMF. As per the director, one of World Bank loans of $700 million has been subject to IMF’s EFF. Two program loans worth $700 million – one for RISE-II and the other for PACE-II – will only be released once the IMF’s loan goes through. Moreover, the Asian Development Bank (ADB) has also identified a loan of $300 million for Capital Market Development program to be conditional on the IMF tranche. Saeed Chaudhry said that the government is facing immense pressure regarding the IMF program as there is a total of $2 billion at stake for the current tranche of the EFF. He said the government would have to resort to commercial loans for the identified conditional projects which are more expensive with an average rate of 5-7% while the ADB and World Bank offer a rate of 2% on average. Sixth review postponed The next tranche of the IMF’s EFF has not been able to go through as the IMF and the Pakistani government have been at a standstill regarding the negotiations. The sixth review had earlier been scheduled for the 12th of January 2022; however, the Finance Ministry requested the IMF for a postponement – to which the IMF agreed. The next date has yet to be announced but spokesperson for the Ministry of Finance, Muzammil Aslam, stated that the government is achieving headway with the pre-conditionalities of the EFF. The supplementary Finance Bill along with the State Bank of Pakistan Amendment Bill have both been introduced in the National Assembly. According to WealthPK, it is expected that as soon as the bills go through the legislative procedure, the IMF-EFF will be resumed. The EFF explainer In 2019, the Pakistani government resorted to the lender as a last resort amidst growing macroeconomic imbalances. The EFF is aimed at countries that have consistent and inherent payment imbalances. The EFF is designed for struggling countries to overcome such imbalances through structural reforms over an extended period of time. The $6 billion loan package comes with a set of austerity measures to ensure fiscal discipline in the country. Some of the conditionalities of the loan are increases in energy tariff, removal of various subsidies, increased taxation and privatisation in the energy sector for efficiency. While in theory, austerity measures seem the way to go about controlling a growing payment imbalance, there has been heated debate in the country about the impacts of the policies on the people. Disagreements between the government and the IMF had led to the stalling of the program, but it was subsequently resumed in November 2021. With the sixth review of the program now postponed, the country has yet to see how the IMF’s EFF will pan out along with other important loans that hinge on it.