KARACHI: A team of experts from the International Monetary Fund (IMF) will be visiting Pakistan in mid-March for the first review of the South Asian country’s $7 billion loan program, an IMF official said on Friday.
A successful review would see the Washington-based lender release around $1 billion tranche to cash-strapped Pakistan, which seeks to boost its foreign exchange reserves to achieve the IMF’s threshold of three-month import cover.
IMF bailouts are critical for Pakistan which narrowly avoided a sovereign default in June 2023 by clinching a last-gasp, $3 billion IMF loan and is currently navigating a tricky path to economic recovery.
“An IMF staff team is scheduled to visit Pakistan in early to mid-March for discussions around the first review under Pakistan’s Extended Fund Facility-supported program,” Mahir Binici, the IMF resident representative in Pakistan, told Arab News in response to a query.
Pakistan, which averted a default in 2023, is currently navigating a path to economic recovery under the $7 billion bailout. The review is expected to revolve around the country’s compliance with its taxation targets and overall structural reforms.
The South Asian country has undertaken several reforms in taxation, energy and others sectors as well as with regard to better management of loss-making state-owned enterprises (SOEs), while provincial governments in Pakistan’s Punjab, Sindh, Khyber Pakhtunkhwa and Balochistan have recently enacted laws to impose taxes on farm incomes in line with the lender’s requirements.
Pakistan’s finance adviser Khurram Schehzad told Arab News in a recent interview that the country was “fully prepared to go into the review process,” adding that the IMF was on board “on the targets and benchmarks that we have achieved as well as only a few we are chasing.”
The South Asian country also seeks to secure an additional $1.5 billion loan from the IMF to deal with climate-related issues under a Resilience and Sustainability Facility (RSF) arrangement.
“In this regard, a technical team will be in Pakistan starting in late February to discuss technical issues related to a possible RSF arrangement,” Binici said.
The Global Climate Risk Index places Pakistan among the countries most vulnerable to climate change.
Floods in 2022, which scientists said were aggravated by global warming, affected at least 33 million people and killed more than 1,700. The country’s economic struggles and high debt burden impinged its ability to respond to the disaster.
IMF mission to visit Pakistan by mid-March to review $7 billion loan program, official says
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IMF mission to visit Pakistan by mid-March to review $7 billion loan program, official says
- A successful review would see the Washington-based lender release around $1 billion tranche to cash-strapped South Asian country
- Islamabad has also requested IMF for additional $1.5 billion Resilience and Sustainability Facility to deal with climate-related issues
Pakistan, UK sign £35 million Green Compact to strengthen climate resilience
- Pakistan ranks among nations most vulnerable to climate change and has seen erratic changes in its weather patterns
- UK will help Pakistan mobilize climate finance, strengthen regulatory frameworks and develop bankable climate projects
ISLAMABAD: Pakistan and the United Kingdom (UK) have formalized a comprehensive climate partnership with the launch of a Green Compact that aims to enhance climate resilience, accelerate clean energy transition and scale up nature-based solutions, including mangrove conservation, Pakistani state media reported on Sunday.
The agreement, signed in Islamabad by Federal Minister for Climate Change and Environmental Coordination Dr. Musadik Malik and UK Minister for International Development Jennifer Chapman, unlocks £35 million in targeted support for green development and long-term climate action, according to Radio Pakistan broadcaster.
Pakistan ranks among nations most vulnerable to climate change and has seen erratic changes in its weather patterns that have led to frequent heatwaves, untimely rains, storms, cyclones, floods and droughts in recent years. In 2022, monsoon floods killed over 1,700 people, displaced another 33 million and caused over $30 billion losses, while another 1,037 people were killed in floods this year.
Mohammad Saleem Shaikh, a spokesperson for Pakistan’s Ministry of Climate Change, described the compact as a “decisive move toward action-oriented climate cooperation,” noting that its implementation over the next decade will be critical for Pakistan which regularly faces floods, heatwaves and water stress.
“The Compact is structured around five core pillars: climate finance and investment, clean energy transition, nature-based solutions, innovation and youth empowerment, and adaptation and resilience,” the report read.
“Under the agreement, the UK will work with Pakistan to mobilize public and private climate finance, strengthen regulatory frameworks for green investment, and develop bankable climate projects.”
Clean energy forms a central component of Pakistan’s transition, with Islamabad planning to expand solar and wind generation to reduce fossil fuel dependence, improve energy security and stabilize power costs, according to Shaikh.
“Renewable energy is now economically competitive, making the transition both environmentally and financially viable,” he was quoted as saying.
“Nature-based solutions, particularly large-scale mangrove restoration, will protect coastal communities from storm surges and erosion while enhancing biodiversity and carbon sequestration.”
Under the Compact, technical support, mentoring and access to investors will be provided to climate-smart startups and young innovators, reflecting Pakistan’s recognition of youth-led initiatives as central to future climate solutions.
On the occasion, Chapman, on her first official visit to Pakistan, underscored the urgency of climate action, highlighting the UK’s support for renewable energy, mangrove and ecosystem restoration, early-warning systems, climate budgeting and international investment flows into Pakistan.
Shaikh described the Green Compact as “a strategic turning point” in Pakistan–UK relations on climate change, saying its effective implementation is essential for Pakistan to meet its national climate targets.
