ADB Approves $250M Loan for Pakistan’s Infrastructure Projects

The Asian Development Bank (ADB) has granted approval for a $250-million policy-based loan aimed at bolstering Pakistan’s drive towards sustainable infrastructure investments through public-private partnerships (PPPs).

The loan forms a crucial component of ADB’s Promoting Sustainable Public-Private Partnerships Programme, designed to facilitate the execution of government policies conducive to fostering an environment for economically viable PPPs while fostering inclusive economic growth.

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

“The programme 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,” he said.

Under the Manila-based lender’s initiative, the program is set to drive reforms aimed at enhancing the absorptive capacity of PPP infrastructure investments. This involves bolstering the legal and institutional framework for public investment management and financial management, thereby fostering more efficient infrastructure planning and sustainable development practices. Additionally, the reforms will integrate climate risk screening and gender considerations into project feasibility assessments and PPP contracts.

ADB Economist Sana Masood emphasized the pivotal role of mobilizing private finance through PPPs to bridge the financing gap in public sector infrastructure projects. Masood underscored the program’s objective to ensure the correct structuring and effective implementation of PPPs in Pakistan, ultimately delivering enhanced efficiency, innovation, and value for money.

Furthermore, ADB disclosed that a $700,000 technical assistance grant is facilitating the preparation and implementation of the program. Additionally, in December 2023, ADB approved an additional $950,000 to support PPP pipeline identification, capacity building, and sector strategy development.