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HomeEconomyPakistan Secures USD 20 Billion World Bank Loan for Development

Pakistan Secures USD 20 Billion World Bank Loan for Development

The World Bank has approved a USD20 billion loan package for Pakistan under a ten-year Country Partnership Framework (CPF), with climate change related investment being a key focus of the agreement.

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The World Bank has approved a USD20 billion loan package for Pakistan under a ten-year Country Partnership Framework (CPF), with climate change related investment being a key focus of the agreement.

The program addresses pressing issues in health, education, and climate resilience while promoting long-term stability in development projects.

According to reports, the CPF is structured to ensure continuity despite expected political changes during the 2025-2035 period.

Under the plan, USD14 billion will come from the International Development Association (IDA) as concessional loans, while USD 6 billion will be provided by the International Bank for Reconstruction and Development (IBRD).

These funds are conditional on Pakistan maintaining strong financial performance and managing debt sustainably. In addition to direct funding, the CPF also aims to attract USD 20 billion in private investments through the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA), potentially increasing total investments to USD40 billion.

The framework prioritizes six key areas: reducing child stunting, improving literacy, expanding fiscal capacity, promoting private sector investment, building climate resilience, and decarbonizing the economy.

The World Bank will reduce funding in sectors like transport, urban infrastructure, and higher education, focusing resources instead on areas with higher development impact.

Pakistani Prime Minister Shehbaz Sharif welcomed the initiative as a significant milestone in addressing Pakistan’s economic challenges. He highlighted the framework’s role in facilitating structural reforms, creating opportunities for long-term growth, and reducing vulnerability to external shocks.

Climate resilience is a key focus of the CPF, reflecting the country’s vulnerability to extreme weather events such as floods and droughts. The framework emphasizes renewable energy projects, carbon reduction initiatives, and climate adaptation strategies.

These investments are designed to protect Pakistan from environmental risks while contributing to global sustainability goals.

Currently, the World Bank oversees USD17 billion in commitments across sectors in Pakistan. The CPF builds on this foundation, creating a more cohesive development strategy to address the country’s longstanding issues.

Following the World Bank board’s approval on January 14, 2025, Vice President for South Asia Martin Raiser will visit Islamabad to discuss the framework’s implementation.

Experts view the CPF as a transformative approach to development financing, emphasizing long-term impact over short-term fixes. By insulating projects from political instability, the program aims to ensure consistent progress and sustainable outcomes.

The CPF is expected to provide a solid foundation for Pakistan’s economic and social development, addressing critical challenges and paving the way for sustained growth over the next decade.

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