KP govt borrows Rs120B foreign loans during FY25

PESHAWAR: The Khyber Pakhtunkhwa (KP) government has acquired Rs 120 billion in foreign loans from the Asian Development Bank (ADB) and the World Bank (WB) during the fiscal year 2024-25, increasing the province’s foreign debt burden.

According to latest statistics on foreign loans, as released by the provincial finance department, two loans were obtained from the ADB for the KP Rural Road Development Project during the first half of the fiscal year. One loan, equivalent to Rs 45 billion, was secured in Japanese yen, while the second, worth Rs 46 billion, was taken in US dollars.

Additionally, in April 2025, the KP government secured Rs 7 billion from the World Bank for the Khyber Pakhtunkhwa Integrated Tourism Development Project (KITE) and another Rs 23 billion for the Khyber Pakhtunkhwa Rural Accessibility Project (KP-RAP).

The Finance Department reports that the province’s total foreign debt rose by 4.42 per cent over the six-month period, increasing from Rs 679 billion to Rs 709 billion by December 31, 2024.

During the same period, the provincial government repaid Rs 23 billion in foreign loans.

Since 1985, KP has fully repaid six loans, reducing the total number of active foreign loans from 106 to 100.

Current projects funded through foreign loans include the Pehur High Level Canal Project, Balakot Hydropower Project, Cities Improvement Project, Emergency Flood Assistance Project, Food Security Support Project, and the KITE Project.

In September 2024, the KP government also established a Debt Management Fund aimed at improving the efficiency of the province’s debt system. An initial investment of Rs 150 billion was made in the fund.

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