The Asian Development Bank (ADB) has approved $500 million in contingent disaster financing for Pakistan. The approval was announced on Wednesday. The money will help Pakistan withstand and respond to natural disasters. It will also provide quick budget support after eligible disaster events.
Purpose of the Financing
According to a statement from the ADB, the financing was approved under the bank's policy-based lending. The goal is to reduce the economic and fiscal impact of disasters, including floods and earthquakes.
"Floods, earthquakes, and other disasters cause Pakistan an estimated $2 billion in annual average losses," the statement read.
The statement added that the 2022 floods alone caused $14.9 billion in direct damage and $15.2 billion in economic losses. These floods pushed as many as 9.1 million people into poverty.
"Poor and rural communities have less capacity to recover, while women and girls are disproportionately affected," the bank said.
Climate and Disaster Resilience Programme
The financing is part of the second subprogramme of the Climate and Disaster Resilience Enhancement Programme. This programme supports reforms to strengthen disaster preparedness and risk management. It also helps integrate resilience measures into Pakistan's development planning and investment.
The programme also aims to strengthen Pakistan's disaster risk financing framework. It will improve the availability of funds after disaster events.
"When disaster strikes, it is often the most vulnerable communities that are hit hardest," ADB Country Director for Pakistan Emma Fan was quoted in the statement as saying.
"Investing in preparedness can help protect lives and livelihoods, reduce economic losses, and safeguard the development gains Pakistan has worked hard to achieve," she added.
Fan said the programme would support Pakistan in implementing "critical reforms to ensure a more resilient future".
The ADB said the programme aligns with Pakistan's priorities for managing disaster risks. It also aligns with the bank's commitment to supporting resilience initiatives across Asia and the Pacific.
Earlier Support and Related News
In October 2024, the ADB approved a $500 million policy-based loan under the Climate and Disaster Resilience Enhancement Programme. That loan aimed to strengthen Pakistan's capacity for disaster planning, preparedness, and response.
In April, the government sought a further $1 billion in ADB financing under the programme's second tranche. The proposed support was to cover disaster risk management, flood management, and climate-resilient investment.
Challenges in Flood Protection
Pakistan's disaster preparedness efforts have faced challenges. These include delays in securing funds for long-term flood protection. In August, the Fourth National Flood Protection Plan was delayed because the government failed to secure required funding from domestic and international donors. These donors included the ADB, the World Bank, and the Japan International Cooperation Agency.
The plan was intended to strengthen protection for agricultural land, homes, and infrastructure after the 2022 floods.
