ISLAMABAD:
The World Bank is preparing to approve a $20 billion lending package for Pakistan, marking the first-ever mega 10-year loan commitment. This landmark financing initiative is designed to safeguard projects from political instability while targeting six crucial sectors. The loan will span from 2025 to 2035, a period expected to include three general elections, and focuses on sectors that have broad political support, ensuring continuity regardless of government changes.
The project, known as the “Pakistan Country Partnership Framework 2025-35,” will prioritize improvements in neglected yet vital sectors like health, education, and climate change. This strategic move highlights Pakistan’s selection as the first nation to receive such a long-term, focused lending plan from the World Bank. The loan, expected to be approved by the World Bank board on January 14, will be divided between the International Development Association (IDA), which will provide $14 billion, and the International Bank for Reconstruction and Development (IBRD), contributing the remaining $6 billion.
In addition to government loans, the World Bank will facilitate $20 billion in private sector lending through its subsidiaries, the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). This brings the total package to $40 billion.
The six targeted sectors will receive substantial investment, excluding industries such as transport, power transmission, and urban infrastructure, which will no longer be supported by IDA or IBRD funding. Instead, these areas will receive support through IFC and MIGA investments. The sectors being prioritized include child health and nutrition, education, climate resilience, environmental decarbonization, fiscal stability, and private sector investment.
The framework aims for a 30% reduction in child stunting, better learning outcomes, and enhanced climate resilience. Key initiatives will help improve water and sanitation, provide health services to millions, and support green energy transitions to reduce pollution and greenhouse gas emissions. The World Bank also aims to enhance fiscal policy, increase tax revenue, and direct more spending to essential services for the underprivileged.
This approach marks a shift from previous short-term, fragmented investments to more significant, sustained development efforts. It seeks to reduce Pakistan’s reliance on volatile political cycles while improving critical infrastructure and services essential for long-term growth.
