The Asian Development Bank (ADB) has pledged to provide Pakistan with $2 billion in new loans each year, with half of that amount offered at concessionary rates. This support comes as Pakistan faces challenges in securing affordable credit due to deteriorating credit ratings.
During his visit to Pakistan, ADB President Masatsugu Asakawa assured the government of the bank’s ongoing support in various sectors, including public-private partnerships, climate and disaster resilience, domestic resource mobilization, women-inclusive finance, and energy sector reforms. Of the total commitment, $1 billion will be available at a fixed interest rate of 2% under ADB’s concessional window.
This concessional financing is significantly cheaper than loans from the International Monetary Fund (IMF), which typically carry interest rates around 5%. Pakistan has been grappling with securing lower-cost credit, often forced to accept unsustainable rates of up to 11%.
The ADB’s commitment is part of a broader four-year package totaling $8 billion, with the Manila-based institution expected to disburse $2 billion annually from 2024 to 2027.
During his visit, Asakawa also inaugurated the foundation of ADB’s new resident mission building in Islamabad, symbolizing the strong bond and long-standing partnership between the ADB and Pakistan. He held discussions with Economic Affairs Minister Ahad Cheema and Prime Minister Shehbaz Sharif to address the country’s development priorities and macroeconomic reforms. Asakawa reaffirmed the ADB’s commitment to supporting Pakistan’s reform agenda, commending the government for its efforts in implementing necessary stabilization measures.
Looking ahead, the ADB is expected to focus on enhancing Pakistan’s climate resilience and sustainable development, exploring strategies to mitigate climate change impacts, invest in social sectors, and develop climate-smart economic infrastructure.
