The World Bank is preparing to approve a $20 billion lending package for Pakistan under a groundbreaking 10-year program aimed at shielding its funded projects from political instability and ensuring sustainable development. The initiative, known as the “Pakistan Country Partnership Framework 2025-35,” will focus on six priority areas, according to a report by The Express Tribune.
Focus Areas for Development
The program is designed to address critical challenges in Pakistan by prioritizing:
- Reducing Child Stunting – Tackling malnutrition to enhance children’s physical and cognitive growth.
- Combating Learning Poverty – Improving access to quality education to boost literacy rates.
- Enhancing Climate Resilience – Strengthening Pakistan’s ability to handle climate-related challenges.
- Decarbonizing the Environment – Promoting sustainable practices to reduce carbon emissions.
- Expanding Fiscal Space – Increasing the government’s financial capacity for development.
- Boosting Private Investment – Encouraging private sector involvement to improve productivity and economic growth.
These areas enjoy broad political support and are expected to remain unaffected by changes in government during the program’s 2025–2035 duration, which will likely include three general elections.
Shielding Projects from Political Shifts
The World Bank’s framework aims to reduce the impact of Pakistan’s volatile political landscape on funded projects. According to the Bank’s assessment, frequent government changes have led to shifting priorities and fragmented projects, diluting their overall impact.
A key Pakistani official involved in the program’s development confirmed that Pakistan is the first country to adopt this 10-year strategy.
Lending Structure and Total Package
The $20 billion indicative loans will be split as follows:
- $14 Billion through the International Development Association (IDA), the World Bank’s concessional arm.
- $6 Billion from the International Bank for Reconstruction and Development (IBRD), a more expensive lending window.
The actual loan disbursements will depend on Pakistan’s performance, debt vulnerability indicators, and alignment with the Sustainable Development Finance Policy.
In addition to these government loans, the framework aims to facilitate $20 billion in private sector financing through the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). This brings the total package to $40 billion, although direct loans to the government will remain at $20 billion.
Phased Approach and Selective Investments
The framework marks a significant shift in strategy, moving away from small, scattered investments across various sectors. Instead, it will focus on larger, more impactful projects in critical areas while phasing out less impactful sectors such as transport, power transmission, telecoms, tertiary healthcare, and higher education.
The World Bank’s new approach emphasizes stability, selectivity, and scalability, aligning projects with Pakistan’s long-term development goals.
Implementation and Monitoring
To ensure effective execution, the framework will be supported by two-year rolling business plans, jointly developed and agreed upon by the World Bank and the Pakistani government.
The strategy underscores the World Bank’s commitment to fostering sustainable growth in Pakistan through targeted investments and reforms, aiming to spur economic growth, attract private investment, and build fiscal resilience.
