An International Monetary Fund (IMF) mission is set to begin negotiations today for the release of $1-1.5 billion in climate financing. The discussions will involve key ministries, including finance, planning, climate change, petroleum, and water resources, as well as the Federal Board of Revenue, disaster management agencies, and provincial governments.
The talks are expected to span three weeks, paving the way for the arrival of the IMF staff mission in early to mid-March for the first biannual review of Pakistan’s $7 billion bailout program.
The government has integrated climate-responsive projects into the upcoming Public Sector Development Programme (PSDP), focusing on high-impact infrastructure, foreign-funded initiatives, and development projects in 20 of the country’s least-developed districts. These measures aim to address climate challenges while promoting sustainable development.
The IMF has acknowledged that such investments could enhance Pakistan’s resilience to climate shocks and support faster economic recovery. However, it has cautioned that additional borrowing for climate resilience could raise debt levels, underscoring the need for fiscal consolidation and structural reforms to maintain economic stability.
