Pakistan secures $500 million ADB loan for climate resilience projects

• Program to enhance inclusive investments in disaster risk mitigation.
• The agreement was signed after the nod from the Minister of Economic Affairs Ahad Cheema.
• ADB project to help address country’s exposure to climate impacts.

Islamabad: Pakistan and the Asian Development Bank (ADB) on Tuesday signed a $500 million Climate and Disaster Resilience Strengthening Program (CDREP) loan agreement to strengthen the country’s resilience against disasters caused by natural hazards and the effects of environmental crises.

The program aims to strengthen Pakistan’s institutional capacity for planning, preparedness and response. It will help promote inclusive investment in disaster risk reduction and climate resilience, while supporting the scaling up of disaster risk financing through a risk-tiered approach.

The agreement was signed after the approval of the Federal Minister for Economic Affairs, Ahad Cheema, according to a press release issued by the Economic Affairs Directorate (EAD).

The Secretary of the Ministry of Finance, Dr. Kazim Niaz and the Director of ADB, Ms. Emma Fan signed the loan agreement. The ceremony was attended by senior officials of the government and the multilateral lender.

Cheema, while agreeing to the agreement, said the signing of the agreement underscores Pakistan’s commitment to prioritize climate change initiatives and scale up disaster risk financing using a risk-tiered approach.

“This program is designed as a programmatic approach and aims to strengthen Pakistan’s capacity for climate change adaptation and disaster risk management by addressing the country’s vulnerabilities to natural disasters and climate impacts,” both officials said in a joint statement after the signing of the agreement.

Last week, Pakistan launched its first National Climate Finance Strategy (NCFS) to address the growing challenges of global warming with a strategy to mobilize capital for climate mitigation and adaptation efforts. The strategy focuses on increasing climate-related investment, attracting international finance and strengthening domestic financial systems.

Federal Finance Minister Muhammad Aurangzeb and Prime Minister’s Coordinator on Climate Change Romina Khurshid Alam jointly launched the NCFS at the Pakistan Pavilion in Baku on the sidelines of the UN International Climate Conference (COP29) on 15 November.

“It is a proud moment for us to be able to roll out Pakistan’s first climate finance strategy, an important step in our commitment to a sustainable and climate-resilient future,” Assistant Prime Minister for Climate Romina Khurshid Alam said in her keynote address. at the launch event.

Explaining the strategy, he said the climate finance strategy outlines a path to bridge the significant financing gap facing Pakistan – a gap we estimate at $348 billion by 2030 for our climate-resilient and low-carbon development goals .

Ranked among the top 10 most climate-vulnerable countries, Pakistan has seen a loss of $30 billion in 2022 floods, directly affecting 33 million people.