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ADB Signs Two Loans with Pakistan to Improve Urban, Transport Sectors

News from Country Offices | 18 December 2017

ISLAMABAD, PAKISTAN (18 December 2017) — The Asian Development Bank (ADB) and the Government of Pakistan today signed two loans totaling $380 million for projects to help improve the country’s urban and transport sectors.

The agreements were signed by Xiaohong Yang, ADB Country Director for Pakistan, and Arif Ahmed Khan, Secretary of the Economic Affairs Division (EAD), at a ceremony in Islamabad.

The Punjab Intermediate Cities Project will provide $200 million to help enhance the quality of life of residents of Sahiwal and Sialkot cities in Punjab province through various urban planning reforms. The Central Asia Regional Economic Cooperation (CAREC) Corridor Development Investment Program – Project 1, meanwhile, will provide $180 million to improve road traffic efficiency along the CAREC Corridor in Pakistan, particularly in the key road sections in Indus Highway (N-55) from DG Khan to Jamshoro, and the spin-off sections of N55 north of DG Khan.

“The agreements signed today demonstrate ADB’s continued partnership with the Government of Pakistan to improve living standards through quality investments in infrastructure,” said Ms. Yang. “Investments of the key national highway infrastructure and improved road safety will lead to the systematic transport sector development and job creation, while our investments in Punjab will help deliver inclusive and sustainable urban development.”

The Punjab Intermediate Cities Improvement Investment Project is part of an urban investment program for intermediate cities in the province. The project will use a phased approach across selected cities to demonstrate the positive impact of an integrated package of planned urban reforms, infrastructure development, and improved service delivery. The initial investment support will focus on Sahiwal and Sialkot, which have demonstrated their capacity to lead the implementation of reforms.

The first project under the CAREC Corridor Development Investment Program, part of a multitranche financing facility (MFF), will build an additional 66 kilometers (km) of 2-lane carriageway along the existing Petaro-Sehwan road; an additional 43 km of 2-lane carriageway along the existing Ratodero-Shikarpur road; and rehabilitate the existing 34 km 4-lane Dara Adamkhel-Peshawar road.

Project 1 was selected based on road conditions, traffic volume, economic rate of return, expected resettlement costs, and environmental impacts. Each tranche under the MFF will have components for implementation support and due diligence advisory services to help the government prepare projects for subsequent tranches.

“I congratulate ADB, EAD, and Finance Division on the successful negotiations leading to the signing of these loan agreements,” said Mr. Khan. “I appreciate ADB’s continued support and partnership with Pakistan in the urban and transport sectors.”

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in cofinancing.