KARACHI: Pakistan is negotiating for additional financing of $1 billion to $1.5 billion from the International Monetary Fund (IMF) to strengthen climate resilience, a senior government functionary said on Tuesday night, as discussions between the two sides continue over the issue.
Last year, Pakistan secured a $7 billion loan under the Extended Fund Facility (EFF) to continue structural reforms and consolidate macroeconomic gains achieved in the past two years through stringent financial measures.
Ranked among the ten most vulnerable countries to climate change, Pakistan has suffered extreme weather events, including floods, droughts and heatwaves, causing significant loss of life in recent years along with billions of dollars in damage to infrastructure. The 2022 floods alone inflicted losses exceeding $35 billion, prompting the government to seek international assistance for rebuilding homes and public property while investing in climate resilience projects.
Islamabad is now looking to tap into the IMF’s climate financing under the Resilience and Sustainability Facility (RSF) and is engaged in talks with a four-member technical team that arrived in the capital on Monday.
“The IMF team is here and discussions are underway for climate financing,” said a senior government official privy to the talks, speaking on condition of anonymity. “Pakistan is seeking about $1 billion to $1.5 billion from the Fund.”
He added the ongoing discussions were expected to conclude “by Friday,” with further details likely to emerge by then.
The RSF, introduced in 2022, aims to provide longer-term, affordable financing to IMF member states facing climate-related and sustainability challenges.
Countries qualify based on their vulnerability to climate shocks and commitment to policy reforms that address these risks and enhance resilience.
The facility typically requires nations to adopt structural policies, such as regulatory reforms and climate adaptation measures, which are monitored periodically to ensure compliance with agreed objectives before disbursements are approved.
Meanwhile, another IMF team is expected to arrive in Pakistan at the beginning of March to conduct a biannual review under the $7 billion EFF program.
