IMF may disburse first tranche of climate loan to Pakistan in ‘about six months’

A view of the International Monetary Fund (IMF) logo at its headquarters in Washington, D.C., U.S., November 24, 2024. (Reuters/File)
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Updated 18 May 2025
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IMF may disburse first tranche of climate loan to Pakistan in ‘about six months’

  • Lender to approve first climate loan payment with the second review of Pakistan’s External Fund Facility program, says source
  • Pakistan’s finance adviser says loan, linked to implementation of key performance indicators, to be released over next 28 months

KARACHI: The International Monetary Fund (IMF) is likely to release the first tranche of its $1.4 billion climate resilience loan for Pakistan “in about six months,” a source with direct knowledge of the development told Arab News on Thursday. 

The IMF last Friday approved a fresh $1.4 billion loan to Pakistan under its climate resilience fund and approved the first review of its $7 billion External Fund Facility program, freeing about $1 billion in cash.

The Washington-based lender is expected to start the Resilience and Sustainability Facility (RSF) funding for Pakistan along with its second review of Islamabad’s EFF program, the source disclosed on condition of anonymity as they are not authorized to speak to media on the matter. 

“With the second review of the EFF, if the [IMF] board approves then they [Pakistan] might get the first tranche of the RSF, ” the source said, adding that the next EFF review is expected to take place “in about six months.”

“For climate financing, nothing will be disbursed now,” they added. 

Pakistan’s finance adviser Khurram Schehzad said the climate loan is not a “one-off payment.”

“The RSF fund will be released gradually over the next 28 months, which is linked to the implementation of 13 KPIs (key performance indicators),” the official told Arab News.

He did not elaborate how much the global lender would release as part of the first tranche.

The RSF will support Pakistan’s efforts in building economic resilience to climate vulnerabilities and natural disasters. The South Asian country has been consistently ranked as one of the worst affected countries due to climate change effects. 

In 2022, Pakistan was devastated by flash floods triggered by unusually heavy rains and the melting of glaciers. The catastrophe killed 1,700 people, displaced more than 30 million others and damaged crops and infrastructure worth $30 billion.

That forced Pakistan last year to request the IMF for the RSF fund to address its vulnerability to climate change.

The IMF on May 9 approved the much-awaited climate loan for Pakistan and disbursed the $1.02 billion as its first tranche under the EFF program on May 13.

The Washington-based lender is scheduled to hold its second EFF review of Pakistan’s economic performance on Sept. 15, Sana Tawfik, the head of research at Arif Habib Ltd., said, citing the IMF’s Pakistan Country Report 2024.

When asked if the next IMF review will be delayed, the source replied in the negative. 

The RSF funds are crucial for Pakistan as its dwindling foreign exchange reserves rose to $10.3 billion last week. This amount does not meet the IMF’s three-month import cover threshold requirement.

In its monetary policy statement on May 5, Pakistan’s central bank said delays in the realization of official inflows coupled with “large debt repayments” weakened net financial inflows into the country till March.

Pakistan, which narrowly averted a sovereign default in 2023 after a last-gasp IMF bailout package, owed about $26 billion debt repayments this year ending June. While most of its foreign debt has been repaid, the country still relies heavily on the IMF’s funds to keep its balance of payment position in check.

The central bank expects the country’s foreign reserves to increase to $14 billion by June “on the back of the expected realization of planned official inflows.”

“This build-up in FX reserves to continue in FY26, based on a moderate current account deficit and improved financial inflows,” the SBP said in its statement.


Pakistan raises over $4.2 billion in bond auction, launches first 15-year zero coupon issue

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Pakistan raises over $4.2 billion in bond auction, launches first 15-year zero coupon issue

  • Muhammad Aurangzeb calls it a major step toward making Pakistan’s financial system resilient
  • He says the country is introducing new, smart ways of borrowing by giving investors more options

KARACHI: Pakistan raised more than Rs1.2 trillion ($4.2 billion) in a government bond auction on Wednesday, including the launch of its first-ever 15-year zero coupon bond, in a move the finance ministry said marked a shift toward longer-term and more diversified debt instruments.

The new zero coupon bond, which does not pay periodic interest but offers a lump sum at maturity, garnered strong investor demand and raised over Rs47 billion ($164.5 million).

The instrument is part of the government’s broader debt management strategy aimed at reducing short-term refinancing risk, encouraging Islamic finance and expanding the country’s long-term investment landscape.

“This is a major step forward in making Pakistan’s financial system stronger and more resilient,” the country’s finance minister, Muhammad Aurangzeb, said in a statement.
“We are introducing new, smart ways of borrowing that reduce risk and give investors more options,” he added. “Our aim is to manage public debt responsibly, promote Islamic finance and attract more long-term investment to support the country’s economic growth.”

The ministry noted the auction saw declining yields across other government securities, reflecting market optimism over moderating inflation and expectations of lower interest rates.

It said the average maturity of domestic debt had also risen from 2.7 years to 3.75 years, easing near-term repayment pressure.

The ministry noted the investor base was also broadening, with more participation from pension funds and insurance companies in addition to commercial banks.

It maintained the diversification helps distribute financial risk and deepen Pakistan’s local capital markets.

Officials also informed additional savings instruments for ordinary citizens, particularly Shariah-compliant bonds, are in development to foster retail investment and financial inclusion.

Despite ongoing global economic uncertainty, the ministry said the auction results reflect renewed investor confidence in Pakistan’s economic direction and reform efforts.


Trump hosts Pakistan army chief for unprecedented lunch, confirms Iran discussed

Updated 19 June 2025
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Trump hosts Pakistan army chief for unprecedented lunch, confirms Iran discussed

  • This was the first time in years that a Pakistani army chief was hosted by a sitting US president at the White House
  • Munir was widely expected to press President Trump not to enter Israel’s war with Iran and to seek a ceasefire

ISLAMABAD: US President Donald Trump on Wednesday hosted Pakistan’s army chief for lunch in an unprecedented White House meeting, after which he told reporters he was “honored” to meet Field Marshal General Asim Munir and that the two had discussed the ongoing Iran-Israel crisis.

This was the first time in many years that a Pakistani army chief was hosted by a sitting US president at the White House, highlighting Washington’s renewed interest in maintaining influence in South Asia as regional tensions flare.

After the schedule for the lunch was announced this week, Pakistani media widely speculated that Munir would press Trump not to enter Israel’s war with Iran and to seek a ceasefire. A section of Pakistan’s embassy in Washington represents Iran’s interests in the United States as Tehran does not have diplomatic relations with the US.

Munir’s White House meeting during the ongoing Mideast conflict has also fueled speculation in Islamabad that Washington could push Pakistan to align more openly with the US position, which has historically been supportive of Israel. Such pressure could complicate Pakistan’s delicate balancing act in the Middle East, where it maintains close ties with Iran and other Gulf partners and sympathizes with the Palestinian cause but seeks to avoid getting dragged into regional rivalries that could inflame tensions at home.

“Well, they [Pakistan] know Iran very well, better than most, and they’re not happy about anything [Iran-Israel conflict],” Trump said in response to a question by a reporter after his meeting with Munir on whether Iran came up in the discussion.

“It’s not that they’re better with Israel. They [Pakistan] know them both actually, but they probably, maybe, know Iran better, but they [Pakistan] see what’s going on. And he [Field Marshal General Asim Munir] agreed with me.”

Trump did not specify what the Pakistani general had agreed with him on, and went on to talk about last month’s military conflict between India and Pakistan that the US president has publicly claimed credit for ending with a ceasefire.

Nuclear-armed neighbors India and Pakistan engaged in their fiercest military conflict in decades between May 7-10, exchanging drones, missiles and artillery for nearly four days before Trump announced he had brokered a truce.

“The reason I had him [Munir] here, I wanted to thank him for not going into the war [with India], just, you know, ending the war,” Trump said, also giving credit to Indian Prime Minister Narendra Modi. “So, I was honored to meet him [Munir] today.”

Tensions between Israel and Iran have spiked sharply since last Friday when Israeli forces struck multiple targets including Iranian nuclear sites and senior officials. Iran retaliated with attacks on Israeli territory, raising fears of a wider Middle East war that could threaten global energy supplies and regional stability.

Pakistan, which shares a long border with Iran and maintains historic ties with Tehran, has repeatedly called for de-escalation and a ceasefire in the region. Defense Minister Khawaja Asif told Pakistan’s Geo TV that Munir’s White House visit would give the army chief a chance to share Pakistan’s perspective on the conflict and push Washington to help prevent further escalation.

Pakistan’s military plays a key role in shaping the country’s foreign policy, and Munir’s high-profile White House invitation is being seen as part of Washington’s broader effort to recalibrate ties with Islamabad, a vital but often difficult ally for the US in South Asia.

Local media in Pakistan reported that Munir’s visit had been arranged weeks in advance. Analysts say the rare top-level contact underscores how the US wants to maintain strategic leverage in a region shaped by the rivalries of three nuclear powers — China, India and Pakistan — and rising instability in the Middle East.


Pakistan secures $1 billion in ADB-backed financing from Middle Eastern banks

Updated 18 June 2025
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Pakistan secures $1 billion in ADB-backed financing from Middle Eastern banks

  • The loan aims to strengthen the country’s fiscal resilience, support reform momentum
  • The government says the deal signals renewed trust in Pakistan’s economic trajectory

KARACHI: Pakistan has signed a $1 billion syndicated term finance facility backed by Middle Eastern banks, marking its return to the region’s financial markets after more than two years, the finance ministry said on Wednesday.
The five-year facility is partially guaranteed by the Asian Development Bank (ADB) under its Policy-Based Guarantee program, which is linked to fiscal reforms undertaken by Pakistan to improve resource mobilization and economic stability.
The financing by the Middle Eastern banks is structured across Islamic and conventional tranches, with 89 percent of the total amount raised through a Shariah-compliant facility.
“This is a landmark transaction for the Government of Pakistan that demonstrates strong support from leading financiers in the region,” the finance ministry said in a statement.
It informed that Dubai Islamic Bank acted as the sole Islamic global coordinator, while Standard Chartered Bank served as mandated lead arranger and bookrunner.
Other financiers include Abu Dhabi Islamic Bank as mandated lead arranger, and Sharjah Islamic Bank, Ajman Bank and Pakistan’s Habib Bank Limited (HBL) as arrangers.
The deal marks the first time a facility has been backed by an ADB Policy-Based Guarantee linked to specific reform measures undertaken by a member country.
According to the ministry, the ADB’s support helped Pakistan attract significant interest from regional lenders and re-enter global capital markets at a critical time for the economy.
The government said the success of the transaction signals renewed trust in Pakistan’s fiscal outlook and macroeconomic trajectory, marking the beginning of a new partnership with Middle Eastern banks.
Pakistan, which has faced persistent external financing gaps in recent years, has relied on friendly nations and global lenders to stabilize its balance of payments and rebuild investor confidence.
The ADB-backed facility is intended to help strengthen fiscal resilience while supporting economic reform momentum.


Pakistan reports first Congo virus death of 2025 in Karachi

Updated 18 June 2025
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Pakistan reports first Congo virus death of 2025 in Karachi

  • Virus is transmitted through tick bites or direct contact with blood of infected animals
  • Pakistan’s southwestern province of Balochistan reported 23 Congo virus cases in 2024

KARACHI: A 42-year-old man lost his life after contracting the Crimean-Congo Hemorrhagic Fever (CCHF), marking the first confirmed fatality from the virus in Pakistan’s southern Sindh province this year, the health department said on Wednesday.

The fatality rate for the Congo virus ranges from 10 percent to 40 percent, depending on the quality of health care, timeliness of treatment and the patient’s overall health, according to the World Health Organization.

The virus, which is endemic in parts of Africa, Europe and Asia, is primarily transmitted through tick bites or contact with the blood or tissues of infected animals.

“First case of Congo virus [has been] reported in Sindh,” the Sindh Health Department said in a statement on Wednesday.

“42-year-old male was a resident of District Malir,” it continued. “The test report came out positive on June 16 and the patient passed away on June 17.”

Pakistan’s southwestern Balochistan province reported 23 Congo virus cases in 2024, with five deaths since January last year.

Local medical practitioners said most cases were diagnosed during the summer, when the likelihood of the virus spreading increases, particularly around the Eid Al-Adha festival.

The Islamic holiday, marked by the mass slaughter of animals, typically leads to greater human-animal interaction and exposure to infected livestock.

Pakistan witnessed its first case of Congo virus in 1976 and remained a major victim for years, according to the National Library of Medicine.

The country faces major challenges in combating Congo virus every year due to its specific geographical position and a majority of the population being involved with animal husbandry, it added.

There is no approved vaccine for its prevention.

The European Medicines Agency in May 2024 approved a Phase I clinical trial in Sweden for a DNA-based vaccine candidate, N-pVAX1, targeting the Congo virus.

Separately, the University of Oxford in August 2023 launched a Phase I trial of its ChAdOx2 CCHF vaccine, based on the Oxford/AstraZeneca Covid-19 platform, to assess safety and immune response.


Pakistan rescues injured Indian sailor amid post-war tensions with New Delhi

Updated 18 June 2025
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Pakistan rescues injured Indian sailor amid post-war tensions with New Delhi

  • Pakistan evacuates the injured sailor from a Liberian-flagged tanker with an all-Indian crew
  • Rare humanitarian gesture follows recent Pakistan-India war amid strained diplomatic ties

ISLAMABAD: Pakistan on Wednesday evacuated an injured Indian sailor from an oil tanker in the Arabian Sea, in a rare humanitarian gesture weeks after the two countries fought a brief four-day war that further strained already tense relations.

The medical evacuation was coordinated by the Pakistan Navy’s Joint Maritime Information and Coordination Center (JMICC), which received a distress call from the Liberian-flagged oil and chemical tanker MT HIGH LEADER, carrying an all-Indian crew.

The Pakistan Maritime Security Agency (PMSA) deployed a vessel and transferred the injured crew member to a hospital in Karachi for emergency treatment.

“The successful medical evacuation is yet another testament to the operational readiness and responsiveness of Pakistan’s maritime safety apparatus,” the Pakistan Navy said in a statement.

“The swift execution reflects Pakistan Navy’s resolve to fulfill its international obligations for the safety of life at sea, irrespective of the nationality of the seafarers involved,” it added.

The incident comes at a time of high diplomatic friction between the two nuclear-armed neighbors.

Last month’s military confrontation, involving missile, drone and artillery exchanges, marked one of the most serious escalations in recent years.

Pakistan has repeatedly called for the revival of a composite dialogue process to resolve long-standing issues, including the Kashmir dispute, cross-border militancy and a water-sharing arrangement under the Indus Waters Treaty.

India, however, has resisted any engagement so far.

The JMICC, which coordinated the evacuation, serves as Pakistan’s central maritime emergency response hub and regularly liaises with both national and international stakeholders.