World Bank Approves $20 Billion Concessional Loan for Pakistan

Washington: The World Bank has approved a $20 billion concessional loan for Pakistan. The loan will be released over the next ten years at a 2 percent interest rate. It is part of the new Country Partnership Framework (CPF) 2025–2035, which focuses on overcoming Pakistan’s long-term development challenges.

Key Highlights of the Loan

• Loan Size: $20 billion over 10 years at 2% interest.

• Private Sector Financing: Another $20 billion is expected through the International Finance Corporation (IFC).

• Total Package: $40 billion in combined support.

• Focus Areas:

  • Climate resilience and poverty reduction

  • Better health and education services

  • Child stunting reduction

  • Inclusive and sustainable growth

  • Clean energy development

  • Air quality improvement

Focus on Development and Growth

The CPF gives Pakistan a clear path to improve both social and economic development. It highlights the need for better education, sanitation, and disaster resilience. In addition, the plan encourages private investment to create jobs and ensure inclusive growth.

Unlike earlier frameworks, this one sets measurable goals. It also calls for closer cooperation between government institutions and the private sector. As a result, the initiative could bring lasting reforms in key areas.

Role of International Partners

The World Bank’s International Development Association (IDA) will handle the loan for government programs. Meanwhile, the IFC will support private businesses with fresh investment opportunities. Together, these moves are designed to improve Pakistan’s infrastructure and expand clean energy projects.

In addition to the World Bank, the Asian Development Bank (ADB) has also stepped forward. It announced a $3 million emergency grant for flood-affected areas in Pakistan. Moreover, ADB President Masatsugu Asakawa offered condolences for recent losses and confirmed that the grant will be released through the Asia Pacific Disaster Response Fund.

Why It Matters

This new support package has the potential to change Pakistan’s economic outlook. With $40 billion in combined financing, Pakistan will have more resources to improve education, fight poverty, and prepare for climate challenges. At the same time, international partners are showing trust in Pakistan’s reform efforts.

Therefore, the CPF 2025–2035 is not just about loans. It represents a long-term commitment to build resilience, reduce poverty, and create opportunities for millions of people. If implemented effectively, this partnership could set Pakistan on a path toward sustainable growth.