Foreign investors are sweet-talkers. They tend to gloss over unwelcome truths while speaking to the press. So when the chair of the UK’s premier development finance institution (DFI) uses words like “very fragile” for the state of Pakistan’s economy, it should set off warning bells in Islamabad.
“As an investor, it’s obviously a concern. It obviously makes a difference as you think about what you might be able to do in the future,” said British International Investment (BII) Chief Executive Nick O’Donohoe while speaking to a small group of journalists at the British Deputy High Commission recently.
BII has made commitments of $350 million through debt and equity in a number of projects in renewable energy, financial inclusion and venture-capital space. In renewable energy alone, its $180m portfolio consists of about half a dozen wind, solar and hydro projects that produce a total of 462 megawatts.
Mr O’Donohoe stopped short of making a definitive comment on the possibility of sovereign default, but noted that “some sort of clarity” was needed for foreign investors. “Any investor will tell you that they hate uncertainty,” he said.