ADB's Work in Pakistan

Pakistan is a founding member of the Asian Development Bank (ADB). The bank has been supporting the country in increasing climate resilience and progress by supporting investments in key sectors and services. ADB operations remain aligned to Pakistan’s evolving economic and development priorities.

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.

As of 31 December 2023, ADB has committed 755 public sector loans, grants, and technical assistance totaling $41.4 billion to Pakistan. ADB’s current sovereign portfolio in Pakistan includes 55 loans and 4 grants worth $10.11 billion.1

Cumulative sovereign and nonsovereign loan and grant disbursements to Pakistan amount to $31.76 billion. These were financed by regular and concessional ordinary capital resources, the Asian Development Fund, and other special funds.

In 2023, ADB’s loan and grant commitments to Pakistan amounted to $1.6 billion. This includes $400 million in program lending, $1.2 billion from project lending, and $13.5 million from grants. The committed resources focus on improving domestic resource mobilization, enhancing women-inclusive finance, rehabilitating schools damaged by the August 2022 devastating floods, strengthening the road transport network under the Central Asia Regional Economic Cooperation (CAREC) Program, improving power transmission systems, and enhancing agricultural productivity to improve food security.

The $300-million policy-based Improved Resource Mobilization and Utilization Reform Program will support the government’s policy reforms and institutional capacity to realize broad-based and sustainable economic recovery. The program will help transform tax administration, public expenditure management, and other institutional structures to strengthen resource mobilization including non-debt resources such as private investment and savings.

The ongoing Sindh secondary education improvement project will receive additional financing—a $275-million emergency assistance loan that is part of ADB’s $1.5-billion pledge to support Pakistan’s recovery from the devastating 2022 floods. Also part of this pledge are a concessional loan of $80 million and a Japan Fund for Prosperous and Resilient Asia and the Pacific grant of $3 million for a food security support project that will help address climate vulnerabilities, enhance food security, and boost the livelihoods of rural farm households in the most flood-damaged districts in Sindh.

ADB committed $155.5 million in financing to support policy reforms enhancing women’s access to finance and provide credit to women-led micro, small, and medium-sized enterprises in Pakistan. The financing comprises a $100-million policy-based loan that supports legal and regulatory reforms for better financial access to women, a $50-million financial intermediation loan that will enable participating financial institutions to lend to women entrepreneurs, and a $5.5-million grant that will fund transformational activities to increase access.

ADB’s Access to Clean Energy Investment Program fitted over 10,700 schools in Punjab and more than 2,000 in Khyber Pakhtunkhwa with rooftop solar panels. More than 1.4 million students are now benefiting from reliable electricity. Photo: ADB

The $180-million Developing Resilient Environments and Advancing Municipal Services in Punjab Project aims to improve water supply and solid waste management services in the rapidly growing cities of Rawalpindi and Bahawalpur in Pakistan’s Punjab province.

ADB also committed $250 million for the Power Transmission Strengthening Project, which will help boost national grid stability, energy security, climate resilience, transmission capacity, and effective national transmission system management.

ADB committed a $360-million loan to upgrade Pakistan’s national highway 55 (N55) and accordingly strengthen regional connectivity under tranche 3 of the CAREC Corridor Development Investment Program. The financing will expand the 330-kilometer section of Rajanpur–Dera Ghazi Khan–Dera Ismail Khan from a two-lane road to a four-lane carriageway, boosting connectivity between the ports of Karachi and Gwardar in southern Pakistan with national and international economic centers to the north.

Nonsovereign operations. Total outstanding balances and undisbursed commitments of ADB’s nonsovereign transactions in Pakistan as of 31 December 2023 amounted to $229.46 million representing 1.94% of ADB’s total private sector portfolio.

Operational challenges. Political transition, security issues, structural risks, the devastating impact of the 2022 floods, and adverse external shocks continue to pose major economic challenges to Pakistan. Political uncertainties compounded with legal and institutional factors weigh on project readiness and overall smooth project implementation. Cumbersome land acquisition procedures, procurement delays, currency devaluation, and price fluctuations are affecting the project outcomes. However, regular tripartite portfolio review meetings among ADB, the government, and executing agencies have helped tackle some of the project implementation issues.

Continued efforts toward fiscal consolidation and policy reforms will be key to improvements in Pakistan’s macroeconomic recovery and stability. Particularly important are efforts aimed at broadening the tax base; reforming state-owned enterprises; improving health, education, and climate resilience; and improving the business environment. Reforms are required to promote high value-added exports, expand social spending, reinforce the energy sector’s governance and sustainability, and implement structural reforms that will strengthen institutions and create jobs.

Knowledge Work

Pakistan’s macroeconomic landscape and economic prospects were featured in the Pakistan chapter of the Asian Development Outlook (ADO) April 2023 and ADO September 2023.

A study entitled Barriers to Entry: Decomposing the Gender Gap in Job Search in Urban Pakistan reveals that employers’ gender restrictions are a larger constraint on women’s job opportunities than supply-side decisions.

A policy brief provides recommendations on improving teacher recruitment, attendance, and training in Pakistan. It looks at the need to better incentivize Pakistan’s teachers and assesses how introducing e-learning into the education system may provide costeffective and affordable ways to strengthen the quality of teaching.

In 2023, ADB launched the Capacity Development Resource Center in Pakistan to strengthen partnership with and deepen knowledge support for the country’s project officers and executing agencies and to facilitate expert advice on project implementation issues. Over 1,000 participants attended a series of business opportunities seminars and training sessions on ADB policies across Pakistan.

ADB helped Pakistan develop a national master plan for flood telemetry and update the National Flood Protection Plan-IV using integrated floods management approaches. ADB also supported the Ministry of Climate Change in developing a dashboard for tracking climate finance and nationally determined contributions to strengthen climate-related knowledge management and strategic planning for future climate investments.

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

Future Directions

Guided by the country partnership strategy, 2021–2025, ADB will continue supporting the Government of Pakistan in its post-flood reconstruction and rehabilitation efforts. Priorities include improving economic management, building resilience, boosting competitiveness, and private sector development.

ADB will be preparing the country partnership strategy for Pakistan for 2026–2030, which will identify key challenges and development requirements, support the government in implementing key structural reforms, and boost economic resilience through a robust pipeline of public-private projects and private sector development. The future pipeline is expected to focus on mitigating the impacts of climate change, investing in the social sector, and developing climate-smart economic infrastructure. ADB will also explore the use of digital technology to boost inclusive growth, expand opportunities, and improve government services. ADB investments in the private sector will continue to help businesses unlock investments, build a culture of entrepreneurship, and contribute to sustainable development. ADB’s knowledge work will continue to include policy advice, provision of relevant knowledge products, and facilitation of the transfer of experiences from other ADB member countries.

Last updated: 9 September 2022