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ADB Approves $500 Million Loan for Climate Resilience in Pakistan

ADB Approves $500 Million Loan for Climate Resilience in Pakistan

ADB Approves $500 Million Loan for Climate Resilience in Pakistan

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The Asian Development Bank (ADB) has granted a $500 million loan to strengthen Pakistan’s climate resilience and disaster preparedness, addressing urgent challenges from climate change impacts. Pakistan’s climate vulnerability remains high, with recent natural disasters highlighting the need for improved disaster response systems.

Building Climate and Disaster Resilience

The Climate and Disaster Resilience Enhancement Programme (CDREP) focuses on strengthening Pakistan’s institutional capacities for disaster risk management. The program aims to improve disaster planning, preparedness, and response mechanisms, enhancing Pakistan’s ability to address natural disasters and climate risks. The ADB’s policy-based loan supports inclusive investments that mitigate risks and create resilient communities through enhanced disaster preparedness.

Impacts of Climate Change on Pakistan

In 2022, climate-triggered floods devastated Pakistan, killing over 1,700 people and affecting 33 million others. The disaster caused $30 billion in damages, severely impacting agricultural land and livelihoods. Pakistan, one of Asia’s most climate-vulnerable countries, faces average annual disaster-related losses exceeding $2 billion. Vulnerable populations, particularly women, are disproportionately affected, underscoring the need for gender-sensitive climate resilience measures.

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ADB’s Commitment Improving Pakistan’s Climate Resilience

ADB’s Director General for Central and West Asia, Yevgeniy Zhukov, highlighted the bank’s commitment to supporting Pakistan’s integrated approach to disaster risk management. “This program builds on ADB’s long-standing work in Pakistan,” Zhukov noted, adding that the initiative includes a diverse portfolio of disaster risk financing instruments to ensure quick response funding for emergencies.

This program includes innovative tools like ADB’s Contingent Disaster Financing option, a first for Central and West Asia, which provides rapid disbursing support after a disaster. The CDREP will also establish a solidarity fund to promote risk transfer solutions, including agricultural insurance and shock-responsive social protection, offering cash assistance in emergencies.

Mobilizing Climate Finance and Enhancing Disaster Readiness

The program will help mobilize climate finance from public and private sectors. This includes plans to issue a domestic green sukuk (Islamic bond). Additionally, the CDREP supports improved disaster risk mapping, risk modeling, and data-driven investment and development planning. Efforts will also go toward improving coordination for disaster monitoring and response, ensuring Pakistan can make well-informed decisions on infrastructure and community investments.

A key aspect of this initiative is gender-sensitive planning. By integrating flood risk management with nature-based solutions, the program prioritizes inclusive development.

Expanding ADB’s Support for Pakistan’s Development

Tuesday’s announcement builds on ADB’s previous commitments to Pakistan. In September, ADB pledged $2 billion in annual assistance over the next three years to support climate-resilient infrastructure projects. Under the ADB’s country partnership strategy for Pakistan (2021–2025), the bank focuses on economic management, resilience building, and private sector growth.

ADB has committed over 755 public sector loans, grants, and technical assistance. Current projects include 55 loans and four grants valued at $10.11 billion, focusing on vital infrastructure and sustainable development.

This support from ADB addresses Pakistan’s urgent need for resources. These resources will help tackle climate change and natural disasters. This action will improve country’s resilience and promote sustainable economic growth.

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