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Pakistan and Islamic Development Bank Sign $603 Million in Development Agreements

By The South Asia Times

Islamabad - Pakistan and the Islamic Development Bank (IsDB) have signed three major loan agreements worth a total of $603 million to fund critical infrastructure, social protection, and education projects across the country.

The agreements were formalized in Islamabad following high-level talks between Pakistan’s Minister for Economic Affairs, Ahad Khan Cheema, and an IsDB delegation led by Vice President Dr. Rami Ahmad. The signing ceremony was attended by Federal Ministers, including Cheema and Syed Imran Ahmad Shah, Federal Minister for Poverty Alleviation and Social Safety, along with senior officials from the Economic Affairs Division.

Under the agreements, the IsDB will provide $475 million to finance the M-6 Sukkur–Hyderabad Motorway, a vital link in the proposed Peshawar–Karachi Motorway network.

The bank will also fund the Poverty Graduation of Extremely Poor and Flood-Affected Households Project (PGEP) with $118.4 million of a total $134.2 million outlay. PGEP aims to transition ultra-poor households from dependence on cash assistance to sustainable livelihoods and economic self-reliance. The project will be implemented across 25 districts — 20 selected based on the Multidimensional Poverty Index (MPI 2024) and five of the most flood-affected districts from 2022 and 2025 — targeting 160,866 households and creating 100,000 employment opportunities through asset transfers, interest-free loans, skills development, climate-smart agriculture, rainwater harvesting, and business support services.

Additionally, the IsDB will provide $10 million to support the Out-of-School Children Project in Azad Jammu and Kashmir, which aims to bring approximately 60,000 children back into classrooms while training 4,000 teachers.

Speaking at the ceremony, IsDB Vice President Dr. Rami Ahmad emphasized the bank’s commitment to further expanding cooperation with Pakistan in areas of mutual interest. Minister Cheema acknowledged the continued support from IsDB, highlighting its importance in advancing Pakistan’s infrastructure, social development, and education initiatives.