Close this search box.

Pakistan to Get Costly $500 Million Loan From ADB


The federal government has decided to get a $500 million loan from the Asian Development Bank (ADB).

The Central Development Working Party (CDWP) has approved the concept proposal for this loan under the Promoting Sustainable Public-Private Partnership Program, reported Express Tribune.

Once conditions are met, the ADB will present the case to its board for the approval of the initial $250 million tranche.

The loan will be disbursed in two installments, with interest rates ranging from 2 percent to 6.5 percent. Most of the loans will be at a higher rate, and the majority of the loan will have a duration of seven years.

Despite suggestions from the Planning Commission to secure a concessional loan from ADB COL instead of OCR, it’s improbable due to Pakistan’s vulnerable external position and limited quota.

The $500 million loan aims to enhance infrastructure financing and public-private partnerships at the federal level, focusing on priority sectors like roads, housing, health, education, water and sanit
ation, and technology.

To qualify for the loan, Pakistan has met nearly a dozen conditions. The government has committed to establishing and activating two funds – the PDF Fund and the Viability Gap Fund (VGF) – and ensuring annual allocations in the budget for their operation.

The government has approved regulations and guidelines to meet ADB conditions, including those related to gender disparity, inclusion, fiscal commitments, and contingent liabilities.

Finance Minister Muhammad Aurangzeb has discussed pending approvals of budget support loans with the ADB’s country head.

Source: ProPakistani