Pakistan signs $603.4 million agreements with Islamic Development Bank to enhance infrastructure, poverty alleviation, and education

ISLAMABAD: Pakistan has secured three significant agreements totalling $603.4 million with the Islamic Development Bank (IsDB) to support key development projects across infrastructure, poverty alleviation, and education sectors. The agreements were finalised during a meeting between IsDB Vice President of Operations, Dr Rami Ahmad, and Pakistan’s Federal Minister for Economic Affairs, Ahad Khan Cheema.

The projects funded by these agreements include:

• $118.4 million allocated for the Poverty Graduation Project, which will help 68,500 households by creating jobs and developing human capital.
• $475 million for the M6 Motorway Project, a crucial 120.8 km stretch of the Peshawar-Karachi Motorway that will fill a key gap in the North-South corridor.
• $10 million for the Out-Of-School Children in AJ&K Project, which will provide non-formal education to 60,000 children, upgrade 135 schools, establish 250 learning centers, train 4,000 teachers, and create climate-resilient facilities.

In a related development, Minister for Economic Affairs Ahad Khan Cheema and IsDB Governor for Pakistan met with Dr. Rami Ahmad in Islamabad, where the IsDB Vice President praised the strong cooperation between the two parties. 

During the meeting, Minister Cheema commended IsDB for its continued support of Pakistan’s development, particularly through the $600 million financing for these priority projects. He emphasised the importance of the M6 Motorway Development Project as a flagship initiative and expressed hope for continued IsDB support for future priority projects.

The meeting also included Muhammad Humair Karim, Secretary of the Economic Affairs Division, and Sajid Manzoor Asadi, Joint Secretary (IsDB Alternate Governor).

Dr. Ahmad briefed the Minister on the successful completion of the IsDB Country Engagement Framework (CEF) 2023–2025, with over $956 million in financing from the bank, surpassing its target. 

Looking forward, both sides discussed preparations for a new Member Country Partnership Strategy (MCPS) for 2026–2030, which will align with Pakistan’s Uraan Pakistan Economic Transformation Plan (2024–2029). This MCPS will allow for comprehensive engagement between the Government of Pakistan and the entire IsDB Group to further support the country’s development goals.