World Bank to Approve USD 20 Billion Lending Package for Pakistan: Report
The World Bank is set to approve a landmark USD 20 billion indicative lending package for Pakistan, aimed at protecting its funded projects from political transitions over the next decade.
Islamabad: The World Bank is set to approve a landmark USD 20 billion indicative lending package for Pakistan, aimed at protecting its funded projects from political transitions over the next decade. This ambitious 10-year initiative, titled Pakistan Country Partnership Framework 2025-35, is designed to focus on six critical areas for long-term growth and development.
Key Focus Areas of the World Bank’s Lending Package for Pakistan
According to The Express Tribune, the World Bank’s new framework will address essential social and environmental issues, including:
- Reducing Child Stunting
- Combating Learning Poverty
- Enhancing Climate Resilience
- Decarbonizing the Environment
- Expanding Fiscal Space
- Boosting Private Investment to Improve Productivity
These targeted sectors have broad support across Pakistan’s political spectrum, which is expected to shield the program from political instability and ensure continuity despite multiple elections in the coming decade. The World Bank’s assessment highlights that the framework will help shield the program from political volatility and prevent fragmentation, which had previously diluted the impact of past projects.
Approval and Financial Details of the 10-Year Lending Framework
The Pakistan Country Partnership Framework 2025-35 is scheduled to be approved by the World Bank’s board on January 14, 2025. Following the approval, the World Bank’s Vice President for South Asia, Martin Raiser, is expected to visit Islamabad.
The USD 20 billion lending package will be allocated over the fiscal years 2025 to 2035. Of this amount, USD 14 billion will be provided by the World Bank’s concessional arm, the International Development Association (IDA), while the remaining USD 6 billion will come from the International Bank for Reconstruction and Development (IBRD), which typically offers more expensive loans.
Also Read: Elon Musk Slams Joe Biden for Awarding George Soros the Presidential Medal of Freedom
In addition to the concessional loans, the World Bank’s International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) are expected to lend an additional USD 20 billion to support private sector growth, bringing the total package to USD 40 billion.
Strategic Shift in World Bank’s Approach to Pakistan’s Development
This lending initiative marks a significant shift in the World Bank’s approach to Pakistan’s development. Instead of focusing on smaller, short-term projects, the new strategy will focus on larger, more impactful investments in critical areas for sustainable development and growth. The framework will phase out funding from less impactful sectors such as transport, telecom, power transmission, tertiary healthcare, and higher education. The focus will now be on long-term, strategic projects with a stable impact.
The World Bank plans to roll out two-year business plans to ensure that the framework’s objectives remain aligned with Pakistan’s needs and evolving circumstances over the next decade.
Impact of the USD 20 Billion World Bank Package
With the approval of the Pakistan Country Partnership Framework 2025-35, the World Bank aims to foster a more resilient, sustainable economy for Pakistan, empowering the country to meet its development goals despite political changes. The lending package’s focus on critical social and environmental issues is expected to play a significant role in reducing poverty and improving the overall well-being of the Pakistani population.
