• ADB okays $540m for two Sindh projects
• WB commits $400m for Punjab’s schemes

ISLAMABAD: The Asian Development Bank (ADB) and the World Bank on Friday approved a total of $940 million to Pakistan for reforms in the state-owned entities (SOEs), water sector and safely managed water, sanitation and basic hygiene services.

Of the total, the Manila-based ADB will be providing about $540m in loan and grant while the Washington-based World Bank will be extending $400m.

The ADB said its board of directors approved two projects totalling $540m to accelerate SOE reforms in Pakistan and enhance disaster resilience in the coastal districts of Sindh. The financing comprises a $400m results-based loan for National Highway Authority (NHA) under the Accelerating SOE Transformation Programme and $140m concessional loan for Sindh Coastal Resilience Sector Project.

“The SOE reform programme for Pakistan seeks to improve governance and optimise the performance of Pakistan’s commercial SOEs, which are vital for the country’s economic stability and development,” said ADB Country Director for Pakistan Emma Fan.

“The programme will also prioritise restructuring and commercialisation of the NHA, one of the largest and most complex entities within Pakistan’s SOE portfolio.” The programme is ADB’s first results-based loan exclusively dedicated to public sector management reform. The bank has been a long-standing partner in supporting Pakistan’s SOE reforms through sector investments, policy operations, and technical assistance.

Substantial progress has been achieved over the past five years with ADB’s support, including the enactment of the SOE Act and SOE Policy in 2023, the establishment of a central monitoring unit, and the introduction of public service obligation agreements aligned with international best practices.

The results-based approach is aimed to facilitate improved corporate governance and drive advancements in institutional capacity, digitalisation, road safety, and financial sustainability. ADB has also approved a complementary technical assistance grant of $750,000 to provide expertise and capacity-building support, ensuring effective implementation of reforms.

The Sindh Coastal Resilience Sector Project aims to strengthen disaster resilience in the vulnerable and underserved districts of Badin, Sujawal, and Thatta.

The project is expected to improve the lives of over 500,000 people, safeguard 150,000 hectares of agricultural land, and restore 22,000 hectares of forest in Pakistan. These outcomes align with Pakistan’s National Flood Protection Plan IV, Sindh Climate Change Policy, and ADB’s Strategy 2030 priorities on environment and resilience.

The project will help reduce greenhouse gas emissions, enhance biodiversity, and improve food security, supporting ADB’s ambition to mobilise $40bn for food systems transformation by 2030. The project is co-financed by a $20m grant and a $20m concessional loan from the Green Climate Fund through the Community Resilience Partnership Programme Investment Fund, administered by ADB for the region.

“The coastal communities in Sindh are increasingly vulnerable to severe natural hazards, including flooding, saltwater intrusion, and water scarcity. This project will protect livelihoods, strengthen food security, and empower women to play a central role in resilience planning and implementation,” said Ms Fan.

The project, implemented by the Sindh Irrigation Department and the Sindh Forest and Wildlife Department, will integrate resilient water resources infrastructure, nature-based solutions, and improved coastal management. Key investments include upgrading drainage and flood protection systems, restoring mangrove and inland forests, and strengthening monitoring and modeling capacity to support future resilience investments.

Water, sanitation services

Separately, the World Bank said its board of executive directors approved $400m in financing for a new project that will provide safely managed water, sanitation and basic hygiene services, and help improve the institutional and financial performance of local urban administration in Punjab province.

The Punjab Inclusive Cities Programme will support the improvement and rehabilitation of water supply networks, sewerage systems, and wastewater treatment plants, provide storm water drainage, and enhance the capacity of local governments to sustainably deliver services and increase revenues in 16 secondary cities in Punjab. The programme will also support the improved performance of solid waste management systems in Punjab, including for sanitary disposal of waste.

It aims to deliver improved water, sanitation, hygiene and drainage services to approximately 4.5m people and improved solid waste management services to an additional 2m people. The programme will help reduce healthcare costs by lowering waterborne disease, lower child stunting rates, and strengthen the capacity of urban local governments to deliver sustainable services.

Published in Dawn, December 13th, 2025

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ISLAMABAD: The Central Development Working Party (CDWP) on Friday cleared a total of eight development projects worth Rs266.55 billion despite serious reservations over 193 per cent cost escalation in Karachi’s Yellow Bus Transit and non-compliance with prior government guideline in Rawalpindi’s cardiac centre.

The meeting of the CDWP, presided over by Planning Minister Ahsan Iqbal, itself approved four projects involving a total cost of Rs10.55bn and recommended four larger projects to the Executive Committee of the National Economic Council (Ecnec) for approval.

The meeting recommended to Ecnec for approval “Karachi Urban Mobility Project (Yellow BRT Corridor)” with an estimated cost of Rs178.593bn despite about 193pc increase in its cost in five years from Rs61bn in 2019. The meeting was told that the project cost increased by 46pc in dollar terms and 193pc in rupee terms as approved by Ecnec.

The “Expansion of Armed Forces Institute of Cardiology and National Institute of Heart Diseases (AFIC-NIHD), Rawalpindi” was referred to Ecnec for formal approval at an estimated cost of Rs12.95bn.

Ecnec to decide Karachi’s Yellow Bus Transit despite 193pc cost surge

The meeting also referred the revised “Prime Minister’s Pakistan Fund for Education” worth Rs14bn to Ecnec for approval.

The CDWP also considered revised ADB-funded “Upgradation/Extension of NTDC’s Telecommunications & SCADA System” worth Rs50.4bn and recommended to Ecnec for approval.

The CDWP approved the “Construction of Graduate Block in Natioal College of Arts Lahore” worth Rs1.607bn to enable country’s premier art education institution to expand its programs.

The meeting also approved Rs4.3bn “Punjab Family Planning Programme” and underscored the critical need for provinces to exercise devolved responsibilities fully. Mr Iqbal expressed concern over Pakistan’s lagging social indicators, citing the country’s status as one of the only two nations worldwide still affected by polio was an embarrassment and a nation with population growth rate of 2.55pc could not progress.

In the Water Resources sector, the forum approved the “Project Readiness Financing (PRF) for Punjab Water Resources Management (PWRM)” at a cost of Rs1.673bn. The meeting also approved another project namely “Hosting Community Support Programme” worth Rs2.988bn for solarising schools and healthcare facilities in Gilgit-Baltistan besides essential education infrastructure.

Published in Dawn, December 13th, 2025

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KARACHI: Despite mounting pressure from industry for immediate relief, a rate cut in the upcoming monetary policy appears unlikely, as the International Monetary Fund (IMF) has advised maintaining tight liquidity to curb expected inflation.

Industrial leaders have called for a reduction in interest rates to help them stay competitive globally, but the government appears satisfied with low economic growth, shrinking exports, rising imports and worsening poverty.

Several manufacturers have already begun shifting operations to Egypt, Mexico, Dubai and Vietnam. Some analysts say pressure is building for at least a 100 basis point cut when the policy is announced on Monday, though most believe the IMF’s stance will prevail.

The last reduction in the policy rate came in May. Since then, the benchmark rate has held at 11 per cent, even as headline inflation dipped to three per cent earlier this year. November inflation was recorded at 6.1pc, compared to 6.2pc in October.

The IMF, which released a $1.2 billion tranche on Thursday, praised the State Bank for maintaining positive real interest rates on a forward-looking basis and said the monetary stance must remain tight and data-driven.

Industrialists demand reduction to stay competitive globally

For the past three years, high interest rates have weighed on growth — first due to record 38pc inflation and now despite inflation falling sharply. Economic expansion has averaged below 2pc, while the central bank has remained focused on “sustainable growth”.

“With inflation under control, PKR holding steady, and reserves outperforming targets, it is imperative for SBP to pivot,” Interloop Limited CEO Musadaq Zulqarnain said in a post on X.

Interloop recently installed a textile unit in Egypt. He said Pakistan’s growth engine had stalled and the industry was under severe stress. “A timely reduction in rates will catalyse business activity — and materially ease the government’s fiscal burden. The moment calls for decisive monetary support,” he added.

However, senior banker Rashid M. Alam said inflation is unlikely to decline any further. If the monetary stance is guided strictly by inflation, then the State Bank should keep the rate as it is at 11pc, he said.

He added that the market remains uncertain, and any rate-cutting cycle amid high inflation, political uncertainty, border tensions, elevated petroleum prices and a widening current account deficit could trigger instability. Considering all these things, the case is to stay neutral, he said.

A former caretaker federal commerce minister, who is also an industrialist, posted on X that Pakistan’s interest rates are nearly twice those of regional economies, including China and India.

“Over the last 36 months, we have attempted to stabilise the economy but achieved less than 2 per cent aggregate growth,” he said, urging the government to reduce interest rates to around 6pc and bring real interest rates down to 1pc.

Published in Dawn, December 13th, 2025

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