Pakistan receives $500 million loan from the ADB (Asian Development Bank) under the Climate Change and Disaster Resilience Enhancement Program (CDREP). The funding is to strengthen Pakistan’s disaster response mechanisms and support its fight against climate change; the inflow is expected to boost the State Bank of Pakistan’s (SBP) foreign exchange reserves, contributing to economic stability.
Pakistan Receives $500 Million Loan from ADB to Strengthen Foreign Reserves
The $500 million loan from ADB will be reflected in SBP’s foreign exchange reserves data for the week ending November 29, 2024, set to be published on December 5, 2024. Currently, the SBP reserves stand at $11.42 billion, and this infusion will enhance the country’s financial stability. The loan will provide much-needed support to Pakistan’s fragile economy by increasing the import cover and stabilising the currency.
Moreover, the program underpins Pakistan’s efforts to improve planning and disaster preparedness while promoting inclusive investments in climate resilience. The funds will focus on integrated flood risk management, nature-based solutions, and gender-sensitive public investments.
Building Climate Resilience Through Strategic Initiatives
The loan agreement aligns with Pakistan’s recent launch of its National Climate Finance Strategy (NCFS), which outlines a roadmap to address the $348 billion climate finance gap by 2030. The strategy emphasizes increasing climate investments, attracting international financing, and enhancing domestic financial systems.
ADB’s funding will provide financial relief and enhance institutional capacity for disaster response and environmental sustainability. With annual losses from natural disasters exceeding $2 billion, this initiative marks a momentous step in safeguarding vulnerable populations, including women and marginalized groups, from the devastating impacts of climate change. Through strategic collaboration and proactive measures, Pakistan aims to pave the way for a sustainable, climate-resilient future while addressing its economic and environmental challenges.
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