Pakistan, ADB sign $730 loan agreements to boost SOE reforms, energy infrastructure

Secretary Economic Affairs Division, Muhammad Humair Karim (front row-left) signing MOU with ADB Country Director, Emma Fan on his right at the Economic Affairs Division in Islamabad, Pakistan, on December 25, 2025. (PID)
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Updated 25 December 2025
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Pakistan, ADB sign $730 loan agreements to boost SOE reforms, energy infrastructure

  • Both sign $330 million Power Transmission Strengthening Project and $400 million SOE Transformation Program loan agreements
  • Economic Affairs Division official says Transmission Project will secure Pakistan’s energy future by strengthening national grid’s backbone

KARACHI: Pakistan and the Asian Development Bank (ADB) on Thursday signed two loan agreements totaling $730 million to boost reforms in state-owned enterprises (SOEs) and energy infrastructure in the country, the bank said.

The first of the two agreements pertains to the SOE Transformation Program worth $400 million while the second loan, worth $330 million, is for a Power Transmission Strengthening Project, the lender said. 

The agreements were signed by ADB Country Director for Pakistan Emma Fan and Pakistan’s Secretary of Economic Affairs Division Humair Karim. 

“The agreements demonstrate ADB’s enduring commitment to supporting sustainable and inclusive economic growth in Pakistan,” the ADB said. 

Pakistan’s SOEs have incurred losses worth billions of dollars over the years due to financial mismanagement and corruption. These entities, including the country’s national airline Pakistan International Airlines, which was sold to a private group this week, have relied on subsequent government bailouts over the years to operate.

The ADB approved the $400 million loan for SOE reforms on Dec. 12. It said the program seeks to improve governance and optimize the performance of Pakistan’s commercial SOEs. 

Karim highlighted that the Power Transmission Strengthening Project will enable reliable evacuation of 2,300 MW from Pakistan’s upcoming hydropower projects, relieve overloading of existing transmission lines and enhance resilience under contingency conditions, the Press Information Department (PID) said. 

“The Secretary emphasized that both initiatives are transformative in nature as the Transmission Project will secure Pakistan’s energy future by strengthening the backbone of the national grid whereas the SOE Program will enhance transparency, efficiency and sustainability of state-owned enterprises nationwide,” the PID said. 

The ADB has supported reforms by Pakistan to strengthen its public finance and social protection systems. It has also undertaken programs in the country to help with post-flood reconstruction, improve food security and social and human capital. 

To date, ADB says it has committed 764 public sector loans, grants and technical assistance totaling $43.4 billion to Pakistan.


Pakistan joins OIC, Islamic nations to reject Israel’s recognition of Somaliland

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Pakistan joins OIC, Islamic nations to reject Israel’s recognition of Somaliland

  • Foreign ministers of 21 Islamic nations, OIC issue joint statement to condemn Israel’s move to recognize breakaway African region
  • Joint statement describes Israel’s move as a “grave violation of the principles of international law and the United Nations Charter“

ISLAMABAD: Pakistan on Sunday joined the Organization of Islamic Cooperation (OIC) and other Arab and Islamic nations in condemning Israel’s recognition of Somaliland, a breakaway African region, calling it a violation of international law and reaffirming its support for the sovereignty and territorial integrity of Somalia. 

Israel this week announced it had recognized Somaliland — a self-declared region that broke away from Somalia in 1991 but has not previously been recognized by any United Nations member state — triggering condemnation from Somalia and criticism from regional bodies.

The joint statement shared by Pakistan’s foreign ministry on Sunday was endorsed by the foreign ministers of 20 other Muslim countries including Jordan, Egypt, Saudi Arabia, Palestine, Qatar, Libya, Iran, Iraq, Türkiye, Yemen and others as well as the OIC. 

“Their unequivocal rejection of Israel’s recognition of the ‘Somaliland’ region of the Federal Republic of Somalia on 26 December 2025, given the serious repercussions of such unprecedented measure on peace and security in the Horn of Africa, the Red Sea, and its serious effects on international peace and security as a whole, which also reflects Israel’s full and blatant disregard to international law,” the joint statement said. 

The statement said Israel’s recognition constitutes a “grave violation of the principles of international law and the United Nations Charter,” pointing out that it reflects Tel Aviv’s expansionist agenda.

The Muslim states said they reject any measures that undermine Somalia’s unity, territorial integrity or sovereignty over its entire territory.

“The full rejection of any potential link between such a measure and any attempts to forcibly expel the Palestinian people out of their land, which is unequivocally rejected in any form as a matter of principle,” the statement said.

The statement was referencing international media reports earlier this year that said Israel and the US had reached out to East African states, including Somaliland, to take in Palestinians from Gaza.

Pakistan’s foreign office on Saturday issued a separate statement condemning Israel’s recognition of Somaliland. 

“Pakistan strongly condemns any attempts to undermine the sovereignty, unity, and territorial integrity of Somalia, and rejects, in this regard, the announcement made by Israel recognizing the independence of the so-called Somaliland region of the Federal Republic of Somalia,” the foreign office had said. 

Somalia’s government has said Israel’s recognition of Somaliland violates its sovereignty, while the African Union has opposed unilateral recognition of breakaway regions on the continent.

Israeli Prime Minister Benjamin Netanyahu said on Friday his country had recognized Somaliland “in the spirit of the Abraham Accords,” referring to US-brokered deals that helped establish ties between Israel and Arab states.