ISLAMABAD: Pakistan and the Islamic Development Bank (IsDB) have signed three loan agreements worth about $603 million to finance multiple development projects, the Pakistani information ministry said on Tuesday.

The agreements relating to M-6 Sukkur-Hyderabad Motorway Project, Poverty Graduation of Extremely Poor and Flood Affected Households Project (PGEP), and the Out-of-School Children project in Azad Jammu and Kashmir were formalized in Islamabad, following talks between Pakistan’s Economic Affairs Minister Ahad Cheema and an IsDB delegation, led by Vice President Dr. Rami Ahmad.

Under the agreements, IsDB will provide financing of $475 million for the M-6 Sukkur–Hyderabad Motorway, a key link to the proposed Peshawar-Karachi Motorway. Pakistan signed the second agreement with IsDB to launch the Poverty Graduation of Extremely Poor and Flood

Affected Households (PGEP) project, aimed at transitioning ultra-poor households from dependency on cash assistance to sustainable livelihoods, resilience and economic self-reliance.

“PGEP has a total outlay of $134.2 million, of which IsDB will contribute USD 118.4 million. The Project will be implemented in 25 districts (20 districts selected based on Multidimensional Poverty Index (MPI 2024) and 5 most flood-affected districts of the 2022 and 2025 floods,” the information ministry said.

“The project aims to reach 160,866 households and create 100,000 employment opportunities through integrated asset transfers, interest-free loans, skills development, rainwater harvesting, climate-smart agriculture, and business service providers’ interventions. The PGEP reflects the Government’s commitment to shifting from consumption-based safety nets to graduation-focused, resilience-driven development, aligned with national priorities and the Sustainable Development Goals (SDGs).”

IsDB will provide another $10 million for the Out-of-School Children project in Azad Jammu and Kashmir, which would help bring about 60,000 children back into classrooms and support training for 4,000 teachers.

“The minister for economic affairs acknowledged and appreciated the continued IsDB support for Pakistan,” the information ministry said. “The IsDB vice president expressed that IsDB was keen on further expanding cooperation with Pakistan in the areas of mutual interest.”

In May last year, IsDB announced funding a Pakistani project to reactivate out-of-work women doctors, while the bank announced a $100 million loan to support Pakistan’s polio eradication efforts in Dec. 2023.