The Asian Development Bank (ADB) has given the green light to a $250 million policy-based loan aimed at bolstering Pakistan’s sustainable infrastructure and services investments through public-private partnerships (PPPs).
The program, named Promoting Sustainable Public–Private Partnerships Program, is designed to support the government’s policies facilitating PPPs, fostering inclusive economic growth, and ensuring fiscal sustainability, as per a press release.
ADB’s Director General for Central and West Asia, Yevgeniy Zhukov, emphasized that this initiative forms part of a broader strategy to assist Pakistan in achieving its fiscal consolidation and growth objectives. He highlighted the program’s role in creating an environment conducive to strategic and financially feasible PPPs, thus advancing the country’s development agenda.
The program targets reforms aimed at enhancing the absorptive capacity of PPP infrastructure investments. It seeks to achieve this by establishing a robust legal and institutional framework for public investment management and financial management specifically tailored for PPPs.
Key aspects of the program include the implementation of an integrated PPP policy, facilitating efficient infrastructure planning, and promoting sustainable development practices. These practices encompass climate risk screening and gender considerations in project feasibility assessments and PPP contracts.
ADB Economist Sana Masood stressed the importance of mobilizing private finance through PPPs to address the financing gap in public sector infrastructure projects. She noted that the program will focus on ensuring that PPPs in Pakistan are appropriately structured and effectively implemented to maximize efficiency, innovation, and value for money.
Furthermore, a technical assistance grant worth $700,000 has been allocated to support the preparation and implementation of the program. In addition, an extra $950,000 was approved by ADB in December 2023 to aid in PPP pipeline identification, capacity building, and sector strategy development.
Pakistan’s longstanding partnership with ADB, dating back to its founding, underscores the commitment to fostering inclusive economic growth. Since 1966, ADB has contributed over $52 billion in loans, grants, and other forms of financing, supporting Pakistan’s infrastructure, energy and food security, transport networks, and social services.
