ADB approves loan for Pakistan, despite India’s propaganda

ISLAMABAD: Advisor to Finance Minister Khurram Schehzad, announced in a post on X (formerly Twitter), that the Asian Development Bank (ADB) has approved $800M financing package for Pakistan under Resource Mobilization Reform Program.

Titled Subprogram-II, it consists of $300 million policy-based lending (PBL) and $500 million public-sector financing (PBG). This loan will also allow Pakistan a guarantee to raise more financing from a global pool of lenders.

“Diplomacy led by Economic Affairs & Ministry of Finance secures majority support at ADB Board,” Schehzad said.

Initially the ADB board meeting was scheduled to be held last week, but Indian representative at the bank requested to postpone the session by one day. This move came after India failed to block the approval of the $1 billion worth second loan tranche by the International Monetary Fund (IMF) to Pakistan.

The ADB board meeting had been convened for May 28 to approve the $300 million budget support loan and another $500 million in guarantees to obtain foreign commercial loans. But the Indian representative delayed it, by using the option of requesting delay of one day in such meetings.

Indian propaganda failed once again here, after Pakistan’s representative at the ADB highlighted the issue of Indian financing and support to terrorist elements in Pakistan’s Balochistan and Khyber Pakhtunkhwa.

The ADB has also released a statement confirming the approval of the loan. In a press release, issued on Tuesday, the ADB confirmed that the program has been approved “to strengthen fiscal sustainability and improve public financial management in Pakistan.”

“Pakistan has made significant progress in improving macroeconomic conditions,” said ADB Country Director for Pakistan Emma Fan. “This program backs the government’s commitment to further policy and institutional reforms that will strengthen public finances and promote sustainable growth.”

The program supports far-reaching reforms to improve tax policy, administration, and compliance, while enhancing public expenditure and cash management. It also promotes digitalization, investment facilitation, and private sector development. These measures aim to reduce Pakistan’s fiscal deficit and public debt, while creating space for social and development spending. The program is underpinned by a comprehensive support package—including technical assistance and close coordination with development partners—designed to help Pakistan build long-term fiscal resilience and stability.

Also read: India asks IMF to reconsider $1b loan to Pakistan