ADB Approves $250 Million Loan for Pakistan

Islamabad: The Asian Development Bank (ADB) has approved a $250 million policy-based loan to support Pakistan's efforts in promoting sustainable investments in infrastructure and services through public-private partnerships (PPPs).

The ADB's Promoting Sustainable Public–Private Partnerships Program aims to implement government policies that foster an environment conducive to fiscally responsible PPPs and inclusive economic growth, according to a press release.

“This program is part of our comprehensive and integrated package of public sector management support that balances the country’s fiscal consolidation and growth objectives,” said Yevgeniy Zhukov, ADB Director General for Central and West Asia.

“The program will help the Government of Pakistan create an environment that is conducive to strategic, fiscally affordable PPPs that will bring the country closer to its development goals,” Zhukov added.

The program supports reforms that will enhance the capacity to absorb PPP infrastructure investments by establishing a more robust and integrated legal and institutional framework for public investment and financial management of PPPs.

According to the press release, the program backs the implementation of an integrated PPP policy. These reforms will enable efficient infrastructure planning and promote sustainable development practices, such as climate risk screening and gender considerations in project feasibility assessments and PPP contracts.

“Mobilizing private finance through PPPs can help to bridge the financing gap in public sector infrastructure projects—which is vital,” said ADB Economist Sana Masood. She added that the program would help ensure PPPs in Pakistan are properly structured and effectively implemented to deliver greater efficiency, innovation, and value for money.

A $700,000 technical assistance grant is funding the program’s preparation and implementation. Additionally, in December 2023, ADB approved another $950,000 to support PPP pipeline identification, capacity building, and sector strategy development.

Pakistan, a founding member of ADB, has received over $52 billion in public and private sector loans, grants, and other forms of financing from ADB since 1966 to promote inclusive economic growth and enhance the country’s infrastructure, energy and food security, transport networks, and social services.