ADB's Work in Pakistan

Pakistan is a founding member of the Asian Development Bank (ADB). ADB has been helping the country reduce poverty and increase resilience and prosperity by supporting investments in key sectors and services. ADB operations remain aligned to Pakistan’s evolving economic and development priorities.

ADB’s country partnership strategy, 2021–2025, for Pakistan focuses on three priorities—improving economic management, building resilience, and boosting competitiveness and private sector development.

To date, ADB has committed 740 public sector loans, grants, and technical assistance totaling $39.7 billion to Pakistan. Cumulative loan and grant disbursements to Pakistan amount to $30.76 billion. These were financed by regular and concessional ordinary capital resources, the Asian Development Fund, and other special funds. ADB’s ongoing sovereign portfolio in Pakistan includes 53 loans and 3 grants worth $9.59 billion.

In 2022, ADB’s loan and grant disbursements to Pakistan amounted to $2.49 billion. This includes $1.8 billion in program lending, $680 million from project lending, and $4.6 million from grants.

ADB provided $1.5 billion to help Pakistan boost social protection, promote food security, and support employment for people.

The Building Resilience with Active Countercyclical Expenditure (BRACE) Program is designed to protect the poorest families, promote gender empowerment, and enable climate adaptation while cushioning the impacts of external shocks.

To help the country improve governance and regulatory capacity, ADB approved a $300-million loan for structural reforms within the Securities and Exchange Commission of Pakistan. The loan will help strengthen the Government of Pakistan’s debt market and enhance market surveillance systems for better information exchange. It also aims to help increase access to financing for growth companies and state-owned enterprises.

ADB’s $1.5 billion Building Resilience with Active Countercyclical Expenditures (BRACE) Program for Pakistan is helping boost social protection, food security, and defray rising living expenses affecting millions of poor and vulnerable, many of whom are also reeling from the devastating floods. Photo: Sara Farid/ADB

ADB committed a $100-million loan to help the Khyber Pakhtunkhwa province in Pakistan improve the delivery of its health care services by modernizing infrastructure and equipment; ensuring implementation of clinical protocols, standards, and guidelines; and improving human resources planning and medicine supply chain management.

Another $100-million loan for the Improving Workforce Readiness in Punjab Project will help strengthen the technical and vocational education and training sector while ensuring that skills training needs meet the demand for jobs in the country’s priority economic sectors.

ADB acted swiftly to provide support following the mid-2022 flood in Pakistan that affected 33 million people, immediately disbursing a $3-million grant under the Asia Pacific Disaster Response Fund for purchase of emergency supplies. This was followed by a $554-million financing package to support flood recovery and reconstruction efforts, and to strengthen the country’s disaster and climate resilience. The financing, which includes a $475-million loan, a $3-million technical assistance grant, and a $5-million grant from the Government of Japan, will support the restoration of irrigation, drainage, flood risk management, on-farm water management, and transport infrastructure in the flood-affected provinces of Balochistan, Khyber Pakhtunkhwa, and Sindh.

Nonsovereign operations. Total outstanding balances and undisbursed commitments of ADB’s nonsovereign transactions in Pakistan as of 31 December 2022 was $242.48 million representing 1.9% of ADB’s total private sector portfolio.

Operational challenges. The devastating floods in 2022, impact of the COVID-19 pandemic, security issues, structural risks, and adverse external shocks continue to pose major economic challenges to Pakistan.

Uncertainties and institutional factors continue to weigh on project implementation. These include land acquisition procedures, procurement delays caused by restrictions, and price fluctuations affecting the importation of construction material. However, tripartite portfolio review meetings among ADB, the government, and executing agencies help resolve project implementation issues.

Continued efforts toward fiscal consolidation and policy reforms will be key to improvements in macroeconomic recovery and stability, especially in broadening the tax base and improving the business environment in the country. Reforms are required to promote high value-added exports, expand social spending, reinforce the energy sector’s financial and technical sustainability, and implement structural changes that will strengthen institutions and create jobs.

Knowledge Work

Pakistan’s Economy and Trade in the Age of Global Value Chains examined the economy and trade of Pakistan in the context of global value chains, or cross-border production networks.

Pakistan’s macroeconomic landscape and economic prospects were featured in the Pakistan chapter of the Asian Development Outlook (ADO) 2022 and ADO 2022 Update.

Other relevant publications include Women’s Mobility and Labor Supply: Experimental Evidence from Pakistan; Building Horticulture Value Chains and Reducing Postharvest Losses in Pakistan; and Solid Waste Management Sector in Pakistan: A Reform Road Map for Policy Makers.

  ADB Projects in Pakistan Project data sheets for loans, grants, TAs

Future Directions

Guided by the country partnership strategy, 2021–2025, ADB will continue supporting the Government of Pakistan in its post-flood reconstruction and rehabilitation efforts. Priorities include improving economic management, building resilience, boosting competitiveness, and private sector development. ADB’s assistance in domestic resource mobilization, financial inclusion, and energy sector reforms will support the government in its macroeconomic management. To build resilience, the bank will continue to support Pakistan in climate adaptation and the transition to clean energy. ADB will also help improve access to finance and support public–private partnerships to steer the country’s economy back to an inclusive, broad-based, and sustainable growth trajectory.

Last updated: 9 September 2022