Pakistan has formally approached the Asian Development Bank (ADB) for a $1 billion loan under the Climate Disaster Resilience Enhancement Programme, aiming to stabilise its economy while enhancing preparedness against climate-related disasters.
According to officials, the proposed financing facility will be disbursed in two phases. The first tranche of $500 million is expected to be released immediately and will be used to shore up Pakistan’s foreign exchange reserves, reflecting ongoing pressure on the country’s external account. Meanwhile, the remaining $500 million will be reserved for disaster response and climate resilience efforts over five years.
Unlike conventional financial assistance, the programme is linked to a framework of climate-focused policy reforms and budgetary restructuring. This means Islamabad will be required to implement institutional changes, many of which have been delayed, as part of the agreement with ADB technical teams. The final contours of these reforms are still under negotiation.
The request highlights Pakistan’s increasing exposure to climate risks. The country faces recurring floods along the Indus basin, persistent droughts in regions such as Balochistan and interior Sindh, and unpredictable monsoon cycles that continue to threaten agriculture and infrastructure.
The devastating 2022 Pakistan floods, which inundated nearly one-third of the country, remains a stark reminder of these vulnerabilities and the cost of inadequate preparedness.
Experts estimate that Pakistan needs between $30 billion and $60 billion annually to effectively tackle climate-related challenges. In this context, the ADB loan—while significant—covers only a small portion of the country’s broader financing needs, underscoring the scale of the climate funding gap.
