ISLAMABAD: Pakistan on Tuesday secured a major financing boost after signing three loan agreements worth $603 million with the Jeddah-based Islamic Development Bank (IsDB), aimed at strengthening transport infrastructure, reducing poverty, and improving access to education.
The agreements were formally signed between IsDB Vice-President Dr Rami Ahmad and Secretary of the Economic Affairs Division Muhammad Humair Karim. The financing will support three projects: the Sukkur-Hyderabad Motorway (M-6), the Poverty Graduation of Extremely Poor and Flood-Affected Households Project (PGEP), and the Out-of-School Children project for Azad Jammu and Kashmir (AJK).
A major portion of the financing — $475 million — has been allocated to the 306-kilometre Sukkur-Hyderabad Motorway (M-6), a critical segment of the north-south motorway network linking Karachi with Peshawar. The M-6 is the only missing link in the corridor and forms part of the Eastern Alignment of the China-Pakistan Economic Corridor (CPEC).
The M-6 project, with an estimated cost of $1.7 billion, is designed as a six-lane motorway with a maximum speed of 120 kilometres per hour. It will feature 89 bridges, 15 interchanges, and 243 underpasses, significantly improving connectivity and logistics efficiency. Construction is expected to begin in April this year, while land acquisition is in its final stages. The project has faced repeated delays and cost escalations, rising from $617 million in 2018 to $1.7 billion in 2025, largely due to financing constraints. Other financiers include the Saudi Fund for Development and the Asian Development Bank.
You May Also Like: IHC Reinstates Bail and Right to Defence for Imaan Mazari-Hazir and Hadi Ali Chattha in Social Media Posts Case
In addition to infrastructure development, IsDB has committed $118.4 million towards the PGEP, out of a total project cost of $134.2 million. The initiative will be implemented in 25 districts, including 20 selected based on the Multidimensional Poverty Index (MPI 2024) and five severely affected by the 2022 and 2025 floods. The project aims to support 160,866 households and generate 100,000 employment opportunities through asset transfers, interest-free loans, skills training, climate-smart agriculture, and livelihood support.
The third agreement involves $10 million for the Out-of-School Children project in AJK, which seeks to enrol around 60,000 out-of-school children and provide training for 4,000 teachers, helping strengthen the region’s education system.
The M-6 is the only missing segment in the north-south motorway network linking Karachi to Peshawar.https://t.co/qMIKsBoRW9
— Dawn Business (@dawn_business) January 21, 2026
Dr Rami Ahmad said IsDB remains keen to expand cooperation with Pakistan in priority development sectors, reaffirming the bank’s long-term commitment to the country’s socio-economic progress.
Check out our latest video:
