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A $1.54 billion loan from ADB will be used to strengthen the energy, transportation, and urban sectors

ISLAMABAD, Pakistan – Pakistan and the Asian Development Bank (ADB) inked six loan and grant agreements worth $1.54 billion on Tuesday to develop the energy, transportation, irrigation, and urban sectors.

The loan and grant agreements were signed by ADB country director Yong Ye and secretary of the economic affairs division Mian Asad Hayaud Din. Last Thursday, the ADB Board of Directors authorised the projects.

Also read: Pakistan signs a $1.5 billion credit arrangement with ADB

ADB’s strong commitment to Pakistan’s post-pandemic recovery and sustainable development is reflected in the projects inked today,” said ADB’s Ye. “Pakistan and the Asian Development Bank (ADB) will continue to collaborate to promote economic management, resilience, competitiveness, and private sector development.”

Minister for economic affairs Omar Ayub Khan, ADB’s vice president (operations 1) Shixin Chen and director general Yevgeniy Zhukov of central and west Asia witnessed the signing ceremony.

A statement said the ADB is supporting technical, and governance reforms to strengthen Pakistan’s energy sector and its financial sustainability under the $300 million policy-based loan for energy sector.

The financing is part of the second subprogram of ADB’s Energy Sector Reforms and Financial Sustainability Program, which aims to reduce and manage the accumulated cash shortfall across the power supply chain known as circular debt.

ADB will provide $235 million loan to upgrade222-kilometer Shikarpur–Rajanpur section of the National Highway 55 from two lanes to four-lane carriageway.

The N55 is part of the Central Asia Regional Economic Cooperation (CAREC) Corridor 5 which links the ports of Karachi and Gwardar with national and international economic centers to the north. The project will improve operations along the network and enhance capacity of National Highway Authority.

The $650 million financing will help improve the livability of five cities in Pakistan’s Khyber Pakhtunkhwa (KP) province by upgrading urban infrastructure and expanding access to reliable services.

The project consists of a $380 million ADB loan and a $5 million grant with a co-financing of $200 million loan by the Asian Infrastructure Investment Bank to improve water supply and sanitation in the cities of Abbottabad, Kohat, Mardan, Mingora, and Peshawar, by enhancing water supply systems and sewerage networks benefitting up to 3.5 million people.

ADB will also provide $15 million under the Second Project Readiness Financing (PRF-2) for Khyber Pakhtunkhwa Cities Improvement to plan and design three ensuing loan in the next three years to provide sustainable urban services and mobility across multiple cities in the province, following a systematic approach to planning, higher quality of project readiness, and increased focus on institutional capacities for sustainable project operations.

Minister Khan said Khyber Pakhtunkhwa Cities Improvement Project will help provincial and city governments to improve the livability of five cities by providing water supply, sewerage, solid waste management and green infrastructure.

“It will also provide institutional support to improve service delivery and performance of municipal companies with special focus on promoting gender-friendly municipal services through empowerment and capacity development,” he added.

Also read: The ADB approves a $1 billion “economic strategy”

The $603 million results-based lending program aims to expand social protection programs in Pakistan through conditional cash transfers. The program will support the implementation of Ehsaas, Pakistan’s national social protection and poverty reduction strategy.

Under the Integrated Social Protection Development Program, ADB will provide a regular loan of $600 million and a $3 million grant from the Asian Development Fund and will administer a $24 million grant from the Education Above All Foundation.

ADB will provide $5 million ‘project readiness financing’ for the Kurram Tangi Integrated Water Resources Development Project. The facility will ensure high-quality design, stakeholder engagement, and safeguards readiness of the ensuing project for timely approval and cost-effective implementation.



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