The government has decided to secure a $1 billion budget support loan from the Asian Development Bank to strengthen policies aimed at tackling climate-related disasters, while deferring a separate $40 million project backed by the World Bank due to concerns over high costs.
The decision was taken during a meeting of the Central Development Working Party chaired by Planning Minister Ahsan Iqbal.
Officials said the loan is part of the Climate Disaster Resilience Enhancement Programme (CDREP). Out of the total amount, $500 million is expected to be released immediately upon approval, while the remaining $500 million will be available as contingent disaster financing over a five-year period.
The initial tranche is anticipated before June and is aimed at supporting the country’s foreign exchange reserves, especially as Pakistan faces significant external debt repayments.
The financing will largely come from ADB’s Ordinary Capital Resources, with Pakistan contributing through policy reforms and institutional improvements rather than direct financial input.
The programme is designed to strengthen disaster preparedness and climate resilience in a country increasingly vulnerable to floods, droughts, and extreme weather events. Officials estimate that Pakistan requires between $30 billion and $60 billion annually to address climate-related challenges.
The loan will support implementation of key initiatives, including the National Disaster Management Plan, improved emergency response systems, and the operationalisation of national disaster management infrastructure.
Additionally, the programme includes plans to mobilise Rs200 billion for a disaster risk financing framework and extend social protection to nearly nine million vulnerable households during emergencies.
Meanwhile, the CDWP deferred approval of a $40 million project supported by the World Bank, citing concerns over excessive costs. The move reflects increasing scrutiny of development project expenses amid fiscal pressures.
Overall, the government’s decision highlights a dual approach: securing critical climate financing while tightening oversight on spending efficiency.
