Pakistan secures $500m ADB loan for climate resilience projects

• Programme to boost inclusive investments in disaster risk mitigation.
• Accord signed after economic affairs minister Ahad Cheema's nod.
• ADB project to help address country’s exposures to climate impacts.

ISLAMABAD: Pakistan and the Asian Development Bank (ADB) on Tuesday signed a $500 million loan agreement for the Climate and Disaster Resilience Enhancement Programme (CDREP) to boost the country's perseverance against catastrophes triggered by natural hazards and the impacts of environmental crises.

The programme aims to foster Pakistan's institutional capacity for planning, preparedness, and response. It will help promote inclusive investments in disaster risk reduction and climate resilience while supporting the scaling up of disaster risk financing through a risk-layered approach.

The agreement was signed after the approval of Federal Minister for Economic Affairs, Ahad Cheema, according to a press release issued by the Economic Affairs Division (EAD).

Secretary of the Ministry of Economic Affairs, Dr Kazim Niaz and ADB Country Director, Ms Emma Fan signed the loan agreement. The ceremony was attended by senior officials from the government and the multilateral lender.

Cheema, while consenting to the agreement, said that signing the agreement underscores Pakistan’s commitment to prioritise climate change initiatives and scaling up disaster risk financing using a risk-layered approach.

"This programme is designed as a programmatic approach and aims to strengthen Pakistan's capacity for climate change adaptation and disaster risk management, addressing the country’s vulnerabilities to natural disasters and climate impacts," both officials said in a joint statement after signing the agreement.

Last week, Pakistan launched its first National Climate Finance Strategy (NCFS) to tackle the growing challenges of global warming with a strategy of mobilising funds for climate mitigation and adaptation efforts. The strategy focuses on increasing climate-related investments, attracting international financing, and enhancing domestic financial systems.

Federal Finance Minister Muhammad Aurangzeb and Prime Minister’s Coordinator on Climate Change Romina Khurshid Alam jointly launched NCFS at the Pakistan Pavilion in Baku on the sidelines of the two-week UN-led global climate conference (COP29) on November 15.

“It is a moment of pride for us to be able to roll out Pakistan’s first-ever climate finance strategy, a major step in our commitment to a sustainable and climate-resilient future,” PM’s climate aide Romina Khurshid Alam said in her keynote remarks at the launching event.

Explaining the strategy, she said that the climate finance strategy outlines a path to bridge the significant climate finance gap facing Pakistan—a gap we estimate at $348 billion by 2030 for our climate-resilient and low-carbon development goals.

Ranked among the top 10 most climate-vulnerable countries, Pakistan experienced a $30 billion loss in the 2022 floods, directly affecting 33 million people.