ADB, Pakistan Sign $250 Million Loan to Drive Sustainable Investments in Infrastructure, Services

The Asian Development Bank (ADB) and Government of Pakistan on Friday signed the agreement for $250 million policy-based loan to assist Pakistan drive sustainable investments in infrastructure and services through public–private partnerships (PPPs).

ADB Country Director Yong Ye and Secretary EAD Kazim Niaz signed the agreement. Ye underscored the importance of conducive enabling environment to foster strategic and fiscally affordable PPPs in Pakistan. ADB on June 5, approved the $250 million policy-based loan for Pakistan.

ADB’s Promoting Sustainable Public–Private Partnerships Program supports implementation of government policies to create an enabling environment for fiscally affordable PPPs and promote inclusive economic growth.

“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 ADB Director General for Central and West Asia Yevgeniy Zhukov. “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.”

ADB’s program supports reforms that will increase the absorptive capacity of PPP infrastructure investments by creating a more robust and integrated legal and institutional framework for public investment management and public financial management for PPPs.

The program supports implementation of an integrated PPP policy. The reforms will facilitate efficient infrastructure planning and promote sustainable development practices in infrastructure projects, 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. “This program will help ensure PPPs in Pakistan are structured correctly and implemented effectively in order to deliver more efficiency, innovation, and value for money.”

A $700,000 technical assistance grant is financing the program’s preparation and implementation. In December 2023, an additional $950,000 was approved by ADB to support PPP pipeline identification, capacity building, and sector strategy development.

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