Pakistan secures nearly $659m loan from ADB

• New wave of financing will help recover from "cost-of-living crisis". 
• Multifaceted approach is part of ADB’s strategic engagement.
• Financing will help reconstruct up to 1,600 flood-damaged schools. 

The Asian Development Bank (ADB) has approved $658.8 million in financing to support Pakistan’s sustainable growth and help it recover from the last year’s cost-of-living crisis.

According to a statement issued by the Manila-based lender on Wednesday, the financing approved for projects will focus on improving domestic resource mobilisation, rehabilitating schools damaged by the devastating August 2022 floods and enhancing agricultural productivity to improve food security.

“This significant new wave of financing will help Pakistan recover from the impacts of last year’s cost-of-living crisis and super-floods and return to the path of long-term development that is sustainable and inclusive,” said ADB Director General for Central and West Asia Yevgeniy Zhukov.

“This multifaceted approach is part of ADB’s strategic engagement in Pakistan and cohesively deploys our programme lending and project investments to enhance support for Pakistan’s efforts to improve its economic situation and enhance the quality of life for its people.”

The Improved Resource Mobilisation and Utilisation Reform Programme will support the government to realise its ambition of achieving economic growth that is sustainable, broad-based, and inclusive.

The $300 million policy-based loan will support the initiative’s first subprogramme, which focuses on laying the foundation for reforms to policies, laws, and institutional capacity that will improve domestic resource mobilisation and utilisation.

The programme is helping to transform tax administration, public expenditure management, and other institutional structures to strengthen resource mobilisation including non-debt resources such as private investment and savings.

The ongoing Sindh Secondary Education Improvement Project will receive additional financing — a $275 million emergency assistance loan that is part of ADB’s $1.5 billion pledge of support for Pakistan’s recovery from the devastating 2022 floods.

The additional financing will help reconstruct up to 1,600 flood-damaged schools using disaster- and climate-resilient and gender-responsive designs. This will boost resilience and inclusivity in the education system in Pakistan, helping recovery of learning and earning losses especially for girls in the most disadvantaged and vulnerable districts of Sindh.

An $800,000 technical assistance grant will be provided to help plan and monitor the status of reconstruction in all flood-damaged schools and provide implementation support, including for introducing inclusive design features.

A concessional loan of $80 million for the Khyber Pakhtunkhwa Food Security Support Project, which is also part of ADB’s $1.5 billion pledge of support for Pakistan’s recovery from the 2022 floods, will help address climate vulnerabilities, enhance food security, and boost the livelihoods of rural farm households in the most flood-damaged districts in the province.

The project will provide essential agriculture inputs and training to smallholder farmers, including women, and improve household nutrition and women’s empowerment.

It will also enhance digital access and availability, especially with regard to market opportunities and climate information.

The bank will administer a $3 million grant for the project from the Japan Fund for Prosperous and Resilient Asia and the Pacific that will finance activities for women farmers related to seed cleaning and the safer handling of agrochemicals.

Pakistan was a founding member of ADB. Since 1966, ADB has committed over $52 billion in public and private sector loans, grants, and other forms of financing to promote inclusive economic growth in Pakistan and improve the country’s infrastructure, energy and food security, transport networks, and social services.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members — 49 from the region, read the statement.