ISLAMABAD: The Asian Development Bank (ADB) on Monday offered more loans to Pakistan for reforms in institutional capacity building and budget support on top of its existing debt stock of about $17 billion.

The offer to Finance Minister Muhammad Aurangzeb was made by an ADB delegation led by its Country Director Emma Fan, Director General for Central and West Asia Department Leah Gutierrez along with senior officials from the local ADB team.

The Manila-based ADB is the second largest multilateral to Pakistan in terms of the debt stock which stood at $16.9bn as of end-June 2025 and third largest among all lenders led by China and then the World Bank.

As of now, the ADB has committed 764 public sectors loans, grants and technical assistance totalling $43.4bn to Pakistan, according to the lending agency. Pakistan’s total external debt stock stands at $107bn by end-June 2025, according to the IMF.

Ms Fan “emphasised ADB’s willingness to support reforms aimed at improving implementation efficiency and strengthening institutional capacity…and confirmed readiness to provide further budget support aligned with the Extended Fund Facility (of the International Monetary Fund), announced the ministry of finance.

The ADB delegation outlined future areas of engagement, including insurance sector reforms, public-private partnerships, pension reforms, and continued support for climate resilience and social sector development, the statement said, adding the ADB representatives expressed appreciation for Pakistan’s reform progress under the IMF programme.

The country director also reaffirmed ADB’s focus on development results, noting that faster project readiness and streamlined processes were essential for timely disbursements and tangible outcomes and committed willingness to support reforms aimed at improving implementation efficiency and strengthening institutional capacity.

In recent months, the ADB has already approved loans to prepare various development projects including sections of mainline railway track (ML-1) to implementation phase given history of stuck up loans and projects in procurement phases due to poor management.

The delegation also updated the finance minister about ADB’s growing engagement in private sector development, including potential private sector transactions, guarantees, and PPP initiatives, such as proposed airport transactions.

The strengthening of ADB’s in-country presence, including the appointment of a new country operations head, was noted as a key step toward deeper engagement and improved project origination.

The finance minister expressed deep appreciation for ADB’s long-standing and timely support to Pakistan, particularly in the areas of budgetary assistance, climate resilience, social sector development, and structural reforms.

He underscored the importance of moving towards an impact-led and Key Performance Indicators-driven development partnership, emphasising that development outcomes, rather than approvals alone, must remain the central measure of success.

Mr Aurangzeb highlighted the government’s resolve to improve project readiness and implementation, noting that delays in execution had historically diluted development impact, especially in social sectors and climate-related initiatives.

While reviewing the Pakistan’s macroeconomic stabilisation efforts and reform trajectory under the IMF’s EFF, the minister pointed out recent external validations, including improved credit ratings, successful IMF reviews, and the approval of the Resilience Sustainability Facility, reflected confidence in Pakistan’s reform agenda.

He reaffirmed commitment to structural reforms, including taxation, energy sector, state-owned enterprises, privatisation, and public financial management.

The minister briefed the delegation on recent progress, including the privatisation of First Women Bank, renewed interest in strategic transactions, and ongoing work on energy sector restructuring and distribution companies and said successful and visible transactions were critical to building momentum and credibility in the privatisation process. The minister also pledged “commitment to trade liberalisation and competitiveness, despite short-term resistance from protected sectors”.

The official statement said the two sides reaffirmed their shared commitment to deepening the Pakistan-ADB partnership, with a strong focus on impact, accountability, private sector development, and inclusive and sustainable growth and agreed to continue close coordination as Pakistan advances its reform and development agenda under the forthcoming country partnership framework and the pipeline for 2026 and beyond.

Published in Dawn, December 16th, 2025

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