Historic 10-Year Partnership
Pakistan is set to receive a $20 billion loan from the World Bank under a unique 10-year partnership framework. This groundbreaking agreement aims to strengthen the country’s development projects despite political changes. The loan package is expected to be approved on January 14, 2025.
Focus Areas of the Loan
The $20 billion loan will target six priority areas to improve social indicators, including health, education, and climate change. The areas selected have broad political support, ensuring continuity over the next decade.
| Target Area | Objective | Expected Impact |
|---|---|---|
| Reducing Child Stunting | Improve health and nutrition, particularly for adolescent girls, mothers, and newborns. | Reduce child stunting by 30%. |
| Improving Education | Improve enrolment and attendance in primary and secondary schools. | Target 12 million children, especially girls, for better education. |
| Climate Resilience | Focus on water and agriculture to build resilience against climate change. | 78 million people will be more resilient to climate risks. |
| Decarbonizing Energy | Shift to cleaner energy sources and reduce greenhouse gas emissions. | 10 GW of renewable energy produced; reduce air pollution. |
| Fiscal Reforms | Enhance revenue collection and rationalize public spending. | Increase tax-to-GDP ratio to 15%, boost social services for the bottom half of the population. |
| Boosting Private Investment | Facilitate private capital investments to enhance productivity. | Facilitate $20 billion in private investments. |
Total $40 Billion Support
In addition to the $20 billion loan, the World Bank’s IFC and MIGA will facilitate $20 billion in private investments, making the total package $40 billion.
| Total Loan Breakdown | Amount ($ Billion) |
|---|---|
| Concessional Loans (IDA) | 14 |
| Non-Concessional Loans (IBRD) | 6 |
| Private Investment (IFC & MIGA) | 20 |
| Total Financial Package | 40 |
Concessional and Non-Concessional Loans
The World Bank will provide $14 billion through concessional loans from the International Development Association (IDA) and $6 billion via non-concessional loans from the International Bank for Reconstruction and Development (IBRD).
Larger, Long-Term Investments
The new framework emphasizes large-scale, long-term investments in critical sectors, marking a shift from short-term projects.
Protecting Projects from Political Instability
This framework will shield projects from political changes by focusing on areas with broad support across political parties.
Commitment to Pakistan’s Development
The World Bank’s long-term partnership aims to address Pakistan’s persistent issues like child stunting, mortality, and learning poverty, promoting sustainable growth.
