The Board of Directors today approved the loan from ADB's concessional Asian Development Fund for the second phase of the Punjab Millennium Development Goals (MDGs) Program. The three-phase program is carrying out reforms to improve access, quality and equity of public health services in the province.

Punjab is the most populous province in the country and accounts for more than 50% of Pakistan's gross domestic product. However key social indicators lag well behind those of neighboring countries. Without major improvements in health care delivery, the province is unlikely to meet the MDGs for reduced child and maternal mortality by 2015.

“The program will help the province cut child and maternal mortality levels and more broadly ensure adequate health care for the poor by improving the availability and quality of health services, and by developing a viable pro-poor health care financing system,” said Linda Arthur, Social Sector Specialist in ADB's Pakistan Resident Mission.

Phase 2 of the program continues earlier actions taken to implement minimum service delivery standards for maternal, neonatal and child healthcare. It supports government measures to enhance equipment and staffing levels at primary and secondary health care facilities, and to strengthen the quality of health workers, such as paramedics, nurses and midwives, through expanded training, improved facilities, and development of a comprehensive human resources plan.

The second phase aims to strengthen the management and performance monitoring of health services, and to make the procurement and supply of essential drugs more efficient. It continues a conditional grant mechanism for district governments who allocate funds to meet minimum service standards for maternal, neonatal and child healthcare, and supports improvements in financial management and fiduciary oversight.

The loan has a 24-year term with a grace period of 8 years, with an interest rate of 1% per annum during the grace period, and 1.5% for the balance of the term. Half of the total loan amount ($75 million) has been allocated for the second round of conditional grants, while the other half will contribute to Punjab's overall health sector financing needs.

The Government of Punjab's Health Department is the executing agency for the program.