By Staff Reporter
ISLAMABAD: Pakistan signed three financing agreements with the Islamic Development Bank totaling about $603 million to fund a major motorway link, poverty alleviation efforts and education initiatives, the information ministry said.
The pacts, sealed in Islamabad on Tuesday following discussions between Economic Affairs Minister Ahad Cheema and a delegation from the Jeddah-based lender led by Vice President Dr. Rami Ahmad, showing the deepening ties between Pakistan and the multilateral institution amid the country’s push to bolster infrastructure and social programs.
The largest chunk, $475 million, will go toward the M-6 Sukkur-Hyderabad Motorway project, a critical segment of the planned Peshawar-Karachi Motorway network that aims to improve connectivity and spur economic activity across the country’s key corridors. A second agreement launches the Poverty Graduation of Extremely Poor and Flood Affected Households Project, or PGEP, with a total cost of $134.2 million.
The IsDB is committing $118.4 million to the initiative, which targets ultra-poor households in 25 districts, 20 selected based on the latest Multidimensional Poverty Index from 2024, plus five of the hardest-hit areas from the devastating floods of 2022 and 2025. The program seeks to shift these families from reliance on cash handouts to self-sustaining livelihoods, emphasising resilience and economic independence. It plans to reach 160,866 households and generate 100,000 jobs through a mix of asset transfers, interest-free loans, skills training, rainwater harvesting systems, climate-resilient agriculture practices and support for business service providers. “The PGEP reflects the Government’s commitment to shifting from consumption-based safety nets to graduation-focused, resilience-driven development, aligned with national priorities and the Sustainable Development Goals (SDGs),” the information ministry said in a statement.
The third deal provides $10 million for an effort to address out-of-school children in Azad Jammu and Kashmir, with goals to enroll around 60,000 kids in classrooms and train 4,000 teachers to enhance educational quality in the region.
Cheema expressed gratitude for the IsDB’s ongoing backing, while Ahmad indicated the bank’s interest in broadening collaboration in shared priorities, according to the ministry. The agreements build on recent IsDB support for Pakistan, including funding announced in May last year to reintegrate out-of-work women doctors into the workforce and a $100 million loan in December 2023 to aid polio eradication campaigns. Pakistan, grappling with fiscal pressures and the aftermath of climate disasters, has leaned on multilateral lenders like the IsDB to finance development amid efforts to stabilize its economy.
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