Pakistan secures $20 billion loan from World Bank: Reports
What's the story
The World Bank is set to approve a $20 billion lending package for Pakistan, reports said. The initiative, called "Pakistan Country Partnership Framework 2025-35," is a historic 10-year plan aimed at protecting funded projects from political changes. The framework focuses on six key areas: reducing child stunting, fighting learning poverty, improving climate resilience, decarbonizing the environment, expanding fiscal space, and increasing private investment.
Approval schedule
Framework approval and implementation timeline
The World Bank board will approve this framework on January 14. After the approval, Martin Raiser, the World Bank's Vice President for South Asia, is expected to visit Islamabad. The framework seeks to shield the program from Pakistan's volatile political environment and frequent changes in priorities due to government transitions.
Strategy launch
Pakistan: First recipient of World Bank's 10-year strategy
A senior Pakistani official associated with the framework's development disclosed that Pakistan is the first country where this 10-year partnership strategy will be rolled out. The total indicative lending envelope from FY 2025 to 2035 will be around $20 billion. This includes $14 billion from the International Development Association (IDA) and another $6 billion through the International Bank for Reconstruction and Development (IBRD).
Lending details
Loan conditions and additional private lending support
The loans depend on IDA funding evolution, Pakistan's performance, and its debt vulnerability indicators. Apart from government loans, the framework also seeks to support another $20 billion in private lending through the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). This takes the total package value to $40 billion.
Strategy shift
Shift in strategy toward larger, more impactful projects
The new strategy marks a shift toward larger projects with more frequent scale-ups and expansions. It will gradually end lending from less impactful sectors like transport and power transmission. The World Bank will continue supporting reforms for growth and investment while creating more fiscal space. Implementation of this framework will be supported by two-year rolling business plans agreed upon by both parties involved.