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The Asian Development Bank (ADB) has officially approved an $800 million financing package for Pakistan, despite vocal opposition from India. The ADB loan for Pakistan includes policy support and credit guarantees aimed at stabilizing the country’s fragile economy.
The lender had previously postponed the approval of said financing package for Pakistan following a formal request from New Delhi. The move came shortly after India’s unsuccessful bid to block a $1 billion IMF tranche sought by Islamabad.
ADB’s financial package for Pakistan includes a $300 million policy-based loan and a $500 million guarantee to help Islamabad secure up to $1.5 billion in foreign commercial loans.
The ADB loan for Pakistan is part of the second tranche under its Resource Mobilization Program. The $500 million guarantee, while not meant for development projects, is designed to boost foreign reserves and investor confidence — particularly crucial due to Pakistan’s low credit rating, which remains at B- despite a recent Fitch upgrade.
During the board session, Pakistan’s Executive Director Noor Ahmed strongly countered India’s claims, instead highlighting Indian interference in Balochistan and Khyber Pakhtunkhwa. He emphasized Pakistan’s need for international financial support to maintain economic stability.
ADB will charge only a nominal fee for the loan guarantee, ensuring affordability. With this move, the ADB has demonstrated its commitment to aiding Pakistan’s economic recovery amid regional political noise.
