Through a policy-based lending programme, the Asian Development Bank (ADB) has promised to continue helping Pakistan this year, concentrating on vital economic and structural reforms.
At the start of the ADB’s 56th annual meeting in Incheon, South Korea, President Masatsugu Asakawa of the organisation made the announcement.
Asakawa acknowledged Pakistan’s initiatives to stabilise its economy, including the implementation of spending restrictions, increased domestic revenue mobilisation, and energy sector reforms, including renewable energy.
He reaffirmed the ADB’s commitment to providing the maximum amount of assistance and expressed the hope that the initiatives taken by the government would help to improve the economic situation of the country.
Through 740 loans, grants, and technical assistance programmes for the public sector, the ADB has committed $39.7 billion to Pakistan.
According to Asakawa, the Asian Development Fund, other special funds, regular and concessional ordinary capital resources, and other loans and grants to Pakistan totaled $30.76 billion.
The $9.59 billion ongoing sovereign portfolio of the ADB in Pakistan consists of 53 loans and three grants.
In 2022, the ADB gave the country loans, grants, and project loans totaling $2.49 billion. These loans, grants, and project loans included $1.8 billion in programme loans, $680 million in project loans, and $4.6 million in grants.
Pakistan received a $1.5 billion contribution from the ADB to improve social protection, promote food security, and promote employment.
The ADB president also unveiled a fresh programme to combat climate change in Asia and the Pacific at the annual meeting.
The Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP) is a multilateral development bank’s first leveraged guarantee mechanism for climate finance.
Asakawa stated that the climate events experienced in the past 12 months would only increase in intensity and frequency, necessitating bold action.
IF-CAP will help the region reduce greenhouse gas emissions and build infrastructure resilient to the impact of climate change. It will contribute to the ADB’s goal of using $100 billion from its own resources to combat climate change for 2019-2030.
Between 2016 and 2030, according to the ADB, infrastructure spending in developing Asia will need to increase by $1.7 trillion annually in order to achieve both development and climate goals.
Denmark, Japan, South Korea, Sweden, the United Kingdom, and the United States will back some of the lender’s loans under the IF-CAP programme and take the losses in the event of default.
The ADB will be able to increase lending to climate-related projects in Asia thanks to the freed up capital it must keep on hand for credit risk.
In short, the ADB’s support for Pakistan and its new initiative to combat climate change in Asia and the Pacific will aid in the sustainable development of the region and help the organisation realise its vision of a prosperous, inclusive, resilient, and sustainable Asia and the Pacific.