Pakistan is seeking scaled-up financing from the Asian Development Bank for public-private partnerships, including the flagship $10 billion Karachi-Peshawar Main Railway Line (ML-1). An ADB delegation, led by Vice President for South, Central and West Asia Yingming Yang, is currently in Islamabad as part of a follow-up to the $10 billion Country Partnership Strategy 2026-30, approved in March.
Key Highlights
- Pakistan seeks scaled-up ADB financing for ML-1 and public-private partnerships
- $2 billion already secured for the Karachi-Rohri section of the 1,670-km ML-1 project
- ADB welcomes Pakistan’s improved sovereign credit ratings
- Officials discuss innovative financing tools, including guarantees and Panda bonds
- ADB proposes working group on Railways Institutional Reforms
The Asian Development Bank (ADB) has offered to help finance Pakistan’s Main Line-1 (ML-1) railway project from Karachi to Peshawar. However, the bank has stressed the need for comprehensive reforms in Pakistan’s railway sector.
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Building on an Already Approved Partnership Strategy
The ADB delegation separately called on Minister for Economic Affairs Ahad Khan Cheema and Finance Minister Muhammad Aurangzeb on Wednesday. ADB has already provided $2 billion to Pakistan for the Karachi-Rohri section of the 1,670-km ML-1 project, which is under execution. Informed sources said the Economic Affairs Division is negotiating with the ADB for additional financing tools, including innovative products such as guarantees and extended private sector partnerships. Sabina Qureshi, a spokeswoman for the EAD, did not immediately return a call for comment on the talks.
Officials Point to Reform Progress as Evidence of Stability
During his meeting with the ADB delegation, Cheema acknowledged the board’s approval of the CPS 2026-30 and discussed the government’s key development priorities, including fiscal, structural, and governance reforms. He said these measures, carried out over the past three to four years in coordination with development partners including the IMF, ADB, and World Bank, have already helped restore investor confidence and build a stronger foundation for sustainable growth. He connected this progress directly to recent gains in macroeconomic stability and the sovereign credit rating upgrades Pakistan has received this year.
Cheema described ML-1 as a national flagship project and said privatization remains a government priority. He said Pakistan is actively working on effective frameworks for public-private partnerships, improving project implementation, and building a stronger pipeline of commercially viable projects. He specifically urged the ADB to scale up its private sector operations in Pakistan, according to an official statement.
ADB Signals Confidence in Pakistan’s Trajectory
The ADB Vice President welcomed the improvements in Pakistan’s sovereign credit ratings from international agencies and acknowledged the country’s efforts to strengthen macroeconomic stability. According to the ADB statement, Yang appreciated the government’s project readiness reforms and recognized that Pakistan has given the ADB an opportunity to introduce innovative financing instruments in the country, including policy-based guarantees and guarantees for the issuance of Panda bonds.
Yang also acknowledged the momentum Pakistan has built around ML-1 and reaffirmed the ADB’s commitment to working closely with the government to move the project toward an early groundbreaking. He proposed establishing a working group focused on Railways Institutional Reforms, assuring officials that this process would begin promptly to give the reform effort a structured platform.
In a separate meeting with the finance minister, Yang pointed to progress in macroeconomic stabilization, fiscal management, and the external account as clear evidence of Pakistan’s continued reform efforts. He described the resulting improvements in sovereign credit ratings as a reflection of the country’s strengthening economic fundamentals, a signal that Pakistan’s ongoing reform push continues to earn recognition from key international lenders.
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