ADB approves $500M loan to boost climate resilience in Pakistan

Islamabad: The Asian Development Bank (ADB) approved a $500 million loan on Tuesday aimed at strengthening Pakistan’s resilience against climate change and natural disasters.

The Climate and Disaster Resilience Enhancement Program (CDREP) will enhance Pakistan’s ability to plan, prepare, and respond to climate risks, with a focus on inclusive investments in climate resilience and disaster risk reduction. The program also promotes a risk-layered approach to disaster financing, as per ADB’s statement.

Pakistan, highly vulnerable to climate-related disasters in Asia, faces annual average losses of over $2 billion from natural hazards, impacting women and other vulnerable communities the most.

“This initiative builds on ADB’s extensive work in Pakistan, addressing climate and disaster risks with effective responses,” said Yevgeniy Zhukov, ADB’s Director General for Central and West Asia. Zhukov added that the program supports a comprehensive disaster risk management strategy, offering diverse financing instruments for timely response.

The program emphasizes advanced disaster risk mapping, enhanced monitoring, and improved response coordination, prioritizing gender-sensitive, resilient investments such as integrated flood management and nature-based solutions. It also aims to mobilize climate finance from public and private sectors, including issuing a green sukuk (Islamic bond).

One key feature is ADB’s Contingent Disaster Financing option, debuting in Central and West Asia, allowing for rapid budget support in disaster scenarios. The program will also establish a solidarity fund to promote agricultural insurance and shock-responsive social protection to provide emergency cash support.

ADB has additionally approved a $1 million grant to facilitate program implementation.