ADB's Work in Pakistan

Pakistan was a founding member of ADB in 1966. Since then, ADB has helped the country reduce poverty and improve the country’s prosperity and resilience by supporting infrastructure, urban services, private sector, energy and food security, transport networks, and social services.

Aligned with the government’s development vision, ADB’s country partnership strategy 2021–2025 for Pakistan focuses on three priorities—improving economic management, building resilience, and boosting competitiveness and private sector development.

To date, ADB has committed 723 public sector loans, grants, and technical assistance totaling $37 billion to Pakistan. Cumulative loan and grant disbursements to Pakistan amount to $28.27 billion. These were financed by regular and concessional ordinary capital resources, the Asian Development Fund, and other special funds. ADB’s ongoing sovereign portfolio in Pakistan includes 48 loans and 3 grants worth $8.42 billion.

In 2021, ADB’s loan and grant disbursements to Pakistan amounted to $1.31 billion, comprising $0.3 billion in program lending and $1.01 billion from project lending and $3 million from grants.

ADB committed $300 million for the construction of Balakot hydropower plant on the Kunhar river near Balakot City in Khyber Pakhtunkhwa. By 2027, the plant will add 1,143 gigawatt hours of clean energy annually to the country’s energy mix, enhancing the energy sector’s reliability and sustainability

Another $300 million policy-based loan was committed to support reforms to strengthen Pakistan’s energy sector and improve its financial sustainability. The program will help reduce and manage the accumulated cash shortfall across the power supply chain known as circular debt. ADB continued to strengthen Pakistan’s finance sector, develop competitive capital markets, and encourage private sector investment.

ADB committed a $235 million loan to further upgrade the 222-kilometer Shikarpur–Rajanpur section of the National Highway 55 from two lanes into a four-lane carriageway, linking the ports of Karachi and Gwadar in southern Pakistan with national and international economic centers to the north. ADB committed $385 million loan to improve the livability and community health in the Khyber Pakhtunkhwa cities including Abbottabad, Kohat, Mardan, Mingora, and Peshawar, benefiting over 3.5 million people.

The Faisal Mosque on the foothills of Margalla Hills in Islamabad, Pakistan. Photo: ADB

Nonsovereign operations. Total outstanding balances and undisbursed commitments of ADB’s nonsovereign transactions in Pakistan as of 31 December 2021 was $441.31 million representing 3.14% of ADB’s total private sector portfolio.

Operational challenges. The COVID-19 pandemic continues to pose major health and economic challenges to Pakistan. Continued efforts toward fiscal consolidation and policy reforms will be key to sustaining improvements in macroeconomic stability, especially in broadening the tax base and improving the business environment. Reforms are required to promote high value-added exports, expand social spending, reinforce energy sector financial and technical sustainability, and implement structural changes that will strengthen institutions and create jobs.

COVID-19 Response

ADB’s support to Pakistan’s coronavirus disease (COVID-19) pandemic response in 2021 included a $500 million loan in August to help procure and deploy safe and effective vaccine, and a $603 million loan—of which $3 million is from the ADF — for an integrated social protection program to strengthen Pakistan’s flagship Ehsaas program. The loan is complemented by a $24 million grant from the Education Above All Foundation.

The program builds on an earlier $500 million loan under ADB’s COVID-19 Active Response and Expenditure Support Program and a $300 million emergency assistance loan to strengthen Pakistan’s public health response to shield the poorest families from the pandemic.

Knowledge Work

Pakistan supports the country’s knowledge plan in the new country partnership strategy 2021–2025 by increasing collaboration with local universities, think tanks, and research centers. ADB provided support for international conferences on sustainable development hosted by the Institute of Business Administration (IBA) in Karachi. The IBA library carries ADB’s digital publications under the depository library program.

Pakistan’s macroeconomic landscape and economic prospects were featured in the Pakistan chapter of the Asian Development Outlook and update in 2021. Other notable publications include a survey to evaluate the impacts of the COVID-19 pandemic and a simultaneous locust invasion on key agricultural output indicators in Punjab and Sindh, and a case study featuring the New Khanki Barrage project in Punjab.

  ADB Projects in Pakistan Project data sheets for loans, grants, TAs

Future Directions

Under the country partnership strategy 2021–2025, ADB will support Pakistan’s development priorities by focusing on improving economic management, building resilience, and boosting competitiveness and private sector development. ADB’s assistance for domestic resource mobilization, financial inclusion, and energy sector reforms will support macroeconomic management. Financing for workforce readiness and health will help build resilience. Support for infrastructure and urban sector investments will improve rural connectivity and urban municipal services. Improving access to finance and supporting public–private partnership will boost competitiveness and private sector development to return the economy to a sustainable growth trajectory. ADB will also help the country prepare for digital transformation through policy improvements, public institution strengthening, and relevant infrastructure investments.