The International Monetary Fund (IMF) is set to offer $1 billion in climate financing to Pakistan, contingent upon the successful completion of the first economic review of the Extended Fund Facility (EFF) loan program in March 2025, according to sources in the Finance Ministry.

If secured, this financing would make the current loan program the largest in Pakistan’s history. However, recent discussions with the IMF mission revealed that progress on obtaining climate-related funds has not met expectations, sources noted.

The Washington-based lender has agreed to Pakistan’s proposal to allocate 1 percent of its GDP annually towards climate change initiatives. These initiatives include efforts to combat natural disasters and the implementation of early warning systems as part of the National Adaptation Plan.

The disbursement of the climate financing is dependent on Pakistan meeting specific conditions related to these targets, ministry sources added.