Pakistan and Asian Development Bank Ink Six Agreements Worth $1.54 Billion

Federal Minister for Economic Affairs, Omar Ayub Khan, witnessed the signing of six Financing Agreements amounting to $1.543 billion between the Economic Affairs Division (EAD), the Government of Pakistan, and the Asian Development Bank (ADB).

Secretary Economic Affairs Division, Mian Asad Hayaud Din, and Country Director Asian Development Bank (ADB), Yong Ye, signed the six financing agreements in Islamabad on 22nd December 2021.

The financing agreements include a $300 million policy-based loan to support financial, technical, and governance reforms to strengthen Pakistan’s energy sector, $385 million financing agreement to improve urban infrastructure in five cities of Khyber Pakhtunkhwa, $235 million project loan to dualize 222-km Shikarpur-Rajanpur Section of Indus Highway (N-55), and $603 million results-based lending program to strengthen and expand Ehsaas Program.

Two project readiness facilities for preparing Kurram Tangi Integrated Water Resources Development Project ($5 million) and Khyber Pakhtunkhwa Cities Improvement Investment Project Phase-II ($15 million) were also signed.

Federal Minister for Economic Affairs, Omar Ayub Khan, expressed his deep appreciation and thanked the President, Senior Management, and Board of Directors of Asian Development Bank for their continued and enhanced financial support towards reforming the energy sector, improving road networks, enhancing social protection, and developing sustainable cities in Pakistan.

Minister for Economic Affairs stated that Khyber Pakhtunkhwa Cities Improvement Project ($385 million) will help provincial and city governments of Khyber Pakhtunkhwa to improve the livability of five cities (Abbottabad, Kohat, Mardan, Mingora, and Peshawar) 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 a special focus on promoting gender-friendly municipal services through empowerment and capacity development. The project will benefit up to 3.5 million people in these five target cities of Khyber Pakhtunkhwa. The project also supports the government’s development priorities and Prime Minister Imran Khan’s vision of Clean Green Pakistan.

Minister for Economic Affairs also highlighted that under the Central Asia Regional Economic Cooperation (CAREC) Corridor Development Investment Program Tranche-II ($235 million), a 222-km Shikarpur-Rajanpur Section of Indus Highway (N-55) will be dualized (four-lane carriageway), which traverses Sindh and Punjab provinces on the western side of Indus River via Kandhkot, Kashmore, and Rojhan.

The dualization of the Indus Highway (N-55) will not only boost local economic activities but also promote intra/inter-regional trade and movement of people by improved connectivity and reduced travel time. Indus Highway provides another international corridor linking China, Afghanistan, and neighboring Central Asian countries to the Arabian Sea.

To ensure the comfort and safety of road users, the section will be equipped with bus shelters, trauma centers, and rest areas as well as road safety facilities, he added.

Minister for Economic Affairs stated that the Integrated Social Protection Development Program would support the government’s efforts to implement the Ehsaas Program, including social protection and poverty reduction schemes in line with the vision of Prime Minister of Pakistan Imran Khan. Kurram Tangi Integrated Water Resources Development Project is one of the top priority projects in the erstwhile FATA, which includes the construction of a dam with water storage facility, hydropower generation, and construction/upgrading of irrigation system covering 140,000 hectares.

It will not only help to increase agricultural production, create employment opportunities and reduce rural poverty in the region but also improve food security in the country. The Minister reiterated the government’s strong commitment to supporting all the Provinces, AJK, and Gilgit-Baltistan for achieving inclusive growth and sustainable development.

Vice President ADB, Shixin Chen, said that despite a challenging situation caused by the COVID-19 pandemic, the Government of Pakistan continues to make progress in implementing comprehensive economic, fiscal, and structural reforms. He also commended the efforts of the Government of Pakistan for addressing socioeconomic challenges and economic recovery amid the pandemic.

Chen appreciated the mass vaccination program for controlling the spread of COVID-19, for which ADB also provided $500 million to Pakistan. Director-General ADB, Mr. Eugene Zhukov, expressed that ADB will continue to support the government’s development priorities and stands committed to supporting Pakistan for green, resilient, and sustainable recovery.

Country Director, Yong Ye, stated that ADB’s financial support would strengthen Pakistan’s economy and reduce the risk of external economic shocks.