AIIB plans deeper private-sector push in Pakistan, eyes non-sovereign financing expansion

The Asian Infrastructure Investment Bank (AIIB) is preparing to expand its engagement in Pakistan by exploring non-sovereign and private-sector financing channels, signaling a potential shift beyond traditional sovereign-backed infrastructure lending.

The direction was discussed during a meeting between Federal Minister for Economic Affairs Ahad Khan Cheema and AIIB President Zou Jiayi, according to an official statement issued on Tuesday.

AIIB President Zou Jiayi reaffirmed that Pakistan remains a strategic development partner for the bank, noting that its overall exposure in the country stands at nearly $3.5 billion. She also sought clarity on Pakistan’s development priorities for the next three to five years to better align future operations.

The bank expressed interest in expanding its footprint beyond sovereign financing by pursuing non-sovereign interventions aimed at strengthening private-sector participation and widening the scope of development cooperation.

Pakistan currently has an active AIIB portfolio of $1.387 billion, as acknowledged by the Economic Affairs Division during the meeting.

Cheema outlined Pakistan’s infrastructure priorities, with particular focus on rail and logistics modernization, stating that improved freight systems could significantly enhance economic efficiency and productivity.

He highlighted key projects for future alignment, including the Main Line-1 (ML-1) railway upgrade, the N-5 National Highway Phase-II, and modernization of electricity transmission and distribution infrastructure.

The minister said Pakistan’s external financing strategy over the next three to five years would focus on select, high-impact and outcome-oriented projects to maximize developmental returns.

He stressed the need for closer alignment between donor-supported portfolios and federal priorities, while also calling for stronger engagement with the private sector, particularly in agriculture value chains.

Cheema further proposed the establishment of an AIIB office in Pakistan to improve coordination and implementation efficiency.

He also urged expedited support for priority infrastructure initiatives while acknowledging the bank’s continued role in energy, transport and urban development financing.