The Asian Development Bank (ADB)
Islamabad: The Asian Development Bank has assured Pakistan it will provide USD 2 billion annually in new loans to the cash-strapped country amid the government's inability to get cheaper credit due to its worsened ratings, according to a media report on Tuesday.
The assurance was given by the visiting Asian Development Bank (ADB) President Masatsugu Asakawa during his interaction with Pakistani authorities on Monday, The Express Tribune newspaper reported, citing Ministry of Economic Affairs officials.
The Manila-based lender is expected to provide USD 2 billion per annum from 2024 to 2027, the officials said, adding that the total four-year package amounts to USD 8 billion. Out of the USD 2 billion, the ADB will give around USD 1 billion at a fixed 2 per cent rate under its concessional window.
Despite having reached a staff-level agreement with the International Monetary Fund (IMF), Pakistan has become a desperate borrower in recent years, striking deals at unsustainably higher interest rates – ranging from 7 per cent to as high as 11 per cent, indicative of lender's scepticism about Islamabad's creditworthiness, the report said.
Three international credit rating agencies have placed Pakistan below the investment grade, a major hurdle in tapping the foreign capital markets.
A press release by the ministry stated that ADB President Asakawa assured Pakistan of its continued support in public-private partnership and climate and disaster resilience enhancement, among other things.
He met with Economic Affairs Minister Ahad Cheema to discuss the country's development priorities and macroeconomic reforms, appreciating the required tough stabilisation measures by the government to bring about macroeconomic stability, the press release added.
During the visit, the ADB president also inaugurated the foundation of the bank's new resident mission building here.
"The groundbreaking of our new resident mission coincides with the beginning of consultation for ADB's new Pakistan Country Partnership Strategy for 2026 to 2030," he said.
"The new strategy will identify key challenges and development requirements, support the government in implementing key structural reforms, and boost economic and climate resilience," he said, adding that the lender will also explore the use of digital technology to boost inclusive growth, expand opportunities, and improve government services.
The ADB remains dedicated to supporting Pakistan's prosperity and regional economic integration, especially with its Central Asian neighbours, for which an important area of focus would be the unlocking of regional linkages through the Central Asia Regional Economic Cooperation (CAREC) programme to open new trade and investment opportunities, he said.
The ADB president also called on Prime Minister Shehbaz Sharif, who said he is personally overseeing the progress of reforms to ensure their successful implementation and long-term impact.
The ADB has appointed a new country director to Pakistan, Emma Fan – a Chinese-born New Zealander, who will replace incumbent country director Yong Ye next month, according to the report.
Washington-based IMF also appointed a new country head, Mahir Bicini, a Turkish national, who will take over in December, it said.
Pakistan joined ADB as a founding member in 1966.