The Asian Development Bank (ADB) has committed to providing Pakistan $2 billion annually in loans from 2024 to 2027, totaling $8 billion over four years.
According to a news report, ADB President Masatsugu Asakawa gave this assurance during his recent visit to Islamabad, where discussions with Pakistani officials focused on the country’s economic challenges and reform agenda.
Out of the $2 billion, around $1 billion will be available to Pakistan at a concessional rate of 2%, a significant relief for the country, which has been grappling with high-interest commercial loans due to its deteriorating credit ratings.
The ADB’s concessional loans offer a more favorable option compared to the IMF’s Extended Fund Facility, which carries an interest rate of approximately 5%.
In recent years, Pakistan has resorted to borrowing at unsustainably high rates, with the finance ministry recently securing a $600 million loan at a record-high 11% interest rate.
During the visit, the ADB president reiterated the bank’s commitment to supporting Pakistan in areas such as public-private partnerships, climate resilience, domestic resource mobilisation, and energy sector reforms.
Asakawa also met Prime Minister Shehbaz Sharif and Economic Affairs Minister Ahad Cheema. The prime minister highlighted the government’s efforts to drive economic reforms, enhance energy sector sustainability, and expand social protection measures.
The ADB president expressed confidence in Pakistan’s reform efforts and underscored the bank’s support for climate resilience and sustainable development.
The visit also saw the signing of two key loan agreements: a $400 million Sindh Emergency Housing Reconstruction Project and a $320 million Khyber-Pakhtunkhwa Rural Roads Development Project. Both initiatives are part of ADB’s flood recovery commitments to Pakistan.
Asakawa also laid the foundation for ADB’s new resident mission building in Islamabad. ADB’s new country director, Emma Fan, will take charge next month, replacing the current head.
