ISLAMABAD: The Asian Development Bank (ADB) has assured to give a loan of 2 billion dollars to Pakistan annually.
Islamabad is trying to get half of this loan at a lower rate because it has not been possible for the Pakistani government to borrow cheaply because of the bad rating.
According to the officials of the Ministry of Economic Affairs, the annual loan of 2 billion dollars was assured during the meetings with the officials during the recent visit of ADB President Masatsugo Isakawa.
According to sources, the Manila-headquartered lender is expected to provide $2 billion annually from 2024 to 2027. In this way, 8 billion dollars will be given in four years. Officials said that ADB will provide half of the two billion dollars annually at a discounted rate of 2 percent.
According to the ongoing press release of the Ministry of Economic Affairs, Masatsugo Isakawa, President of the Asian Development Bank, during his meeting with the Federal Minister for Economic Affairs Ahad Cheema, discussed public-private partnership, protecting Pakistan from climate and natural disasters, mobilization of country’s resources, women’s empowerment. Assured continued support for financial inclusion and energy sector reforms.
He reiterated ADB’s confidence and continued support for Pakistan’s reform agenda and development. President Isakawa appreciated the government’s comprehensive reforms initiative. Minister Ahad Cheema informed the details of the government reforms. Key reforms include increasing tax revenue, improving the financial sustainability of the energy sector, reducing untargeted subsidies and promoting social protection programs.
Secretary Ministry of Economic Affairs Kazim Niaz and President Isakawa attended the foundation stone ceremony of the new building of Asian Development Bank in Islamabad. Kazim Niaz said that the new building will open a new exciting chapter in our partnership established since 1966. This will be the bank’s fourth building in the entire region. ADB also appointed Miss Emma Fan, a New Zealand-born Chinese national, as the new country director for Pakistan.
Isakawa said that it is a coincidence that the deployment of our new mission and the Bank’s new “Pakistan Country Partnership Strategy” from 2026 to 2030 are coming together. He said an important area of focus would be to open up new trade and investment opportunities through the Central Asia Regional Economic Cooperation (CAREC).
It should be noted that in recent years, Pakistan has obtained loans at interest rates ranging from 7 percent to 11 percent. Three credit rating agencies have downgraded Pakistan to the investment-grade category, making it difficult to tap into foreign capital markets. The expected interest rate of the IMF loan is 5%. Federal Minister of Finance and Revenue Senator Muhammad Aurangzeb hosted a dinner in honor of President ADB Isakawa and his delegation.
The Finance Minister said that the Asian Development Bank has played an important role in supporting the development agenda of Pakistan. He appreciated ADB’s continued support in key sectors such as infrastructure, energy, education and social development. Federal Minister for Power Sardar Owais Leghari, Federal Minister for Petroleum Mossadegh Malik, Minister of State for Finance Ali Pervez Malik, Chairman SECP, Deputy Governor State Bank, Secretary Finance also attended the dinner. Mr. Asakawa acknowledged the strong relationship between Pakistan and ADB.
