The International Monetary Fund has approved a $1 billion loan as part of a bailout package to Pakistan, following reforms to rein in state spending, increase tax collection and make the central bank more independent, the IMF and the countrys finance minister said.

The much-needed tranche was initially to be released last year, under an agreement signed in 2019, but was held back because of a delay in Pakistan's compliance with terms. Public and political opposition had been strengthened by worries during the coronavirus pandemic.

Pakistan's finance minister Shaukat Tarin took to Twitter Wednesday night to announce the coming disbursement and welcome the news, which the IMF said meant some $3 billion will have been loaned out to date from the total $6 billion bailout package.

The development comes as Pakistan faces a fifth wave of COVID-19 which authorities say has slammed the country's economy. The IMF statement said in a statement that the Pakistani economy has continued to recover despite the challenges from the COVID-19 pandemic, but imbalances have widened and risks remain elevated."