The Asian Development Bank (ADB) has approved an $800 million financing package for Pakistan, brushing aside objections raised by India. The decision was finalized at a board meeting held on June 3, which had originally been scheduled for May 28.
According to sources, ADB’s executive director for Pakistan, Noor Ahmed, firmly rejected Indian allegations regarding the potential misuse of ADB funds. Instead, he turned the spotlight on India’s alleged involvement in financing terrorism in Balochistan and Khyber Pakhtunkhwa.
The newly approved financing package comprises a $300 million policy loan and a $500 million guarantee, which will help Pakistan secure up to $1.5 billion in foreign commercial loans. This loan marks the second tranche under ADB’s Resource Mobilization Program.
The $500 million guarantee is particularly significant for Pakistan, given the country’s low credit rating, which remains at B- despite a recent upgrade by Fitch. The ADB will charge only a nominal fee for the guarantee, which is intended to bolster Pakistan’s foreign reserves rather than fund development projects.
