$1bn ADB loan for Pakistan on the cards

ISLAMABAD: The management of Manila-based Asian Development Bank (ADB) has approved $1 billion loan comprising $500 million for Subprogramme-1 for FY25 and up to another $500 million for CDF (contingent disaster financing) for FY26, senior officials of the Finance Division told The News.

The ADB management, they said, has recommended to its Board to approve the programmatic approach in the next meeting for the Climate and Disaster Resilience Enhancement Programme (CDREP) and the loan of $500 million to Pakistan for Subprogramme-1 of the Climate and Disaster Resilience Enhancement Programme from ADB’s ordinary capital resources, in regular terms, with interests to be determined as per the ADB’s flexible Loan Product for a term of 15 years with a grace period of three years.

“The size of the programme is determined by the government’s development financing needs for FY25 through FY30 and the expected future costs of climate change and disaster events. “The balance of government’s financing needs will be met from multilateral and bilateral development partners and domestic borrowing. The CDF (contingent disaster financing) size is appropriate considering that the annual average losses from floods and earthquakes are estimated at $2 billion,” the officials added. The government has assured ADB that implementation of the programme would conform to all applicable ADB policies including those concerning anti-corruption measures, safeguards, gender, procurement, consulting services and disbursement as described in detail in the draft loan agreement.