Islamabad, August 30, 2025: The World Bank has agreed to extend a $20 billion loan to Pakistan at a concessional interest rate of just 2% over 10 years, aimed at supporting wide-ranging development and climate resilience initiatives.
According to sources in the Ministry of Finance, the funding will target six priority sectors including climate resilience, poverty alleviation, health and education, child stunting reduction and inclusive development.
Additional focus areas include clean energy, improved air quality, and promotion of private investment.
The concessional financing is part of a 10-year Country Partnership Framework recently finalised between Pakistan and the World Bank. A national implementation plan is currently being prepared, with execution expected to begin soon.
In addition to the sovereign lending package, an extra $20 billion is expected to be made available to Pakistan’s private sector under the same framework, though at comparatively higher interest rates. This would bring the total financing envelope to $40 billion over the next decade.
Officials confirmed that sovereign loans will be provided through the International Development Association (IDA) and private sector financing will be routed via the International Finance Corporation (IFC).
The agreement is expected to bolster Pakistan’s fiscal stability, while driving investments in sustainable infrastructure, social development, and climate adaptation — sectors considered critical to the country’s long-term growth and resilience.
