KARACHI: The Asian Development Bank (ADB) has approved $500 million in disaster financing for Pakistan to provide rapid budget support following floods and other natural calamities, the lender said in a statement on Wednesday, as the climate-vulnerable South Asian nation seeks to strengthen its ability to respond to emergencies.

Pakistan faces an estimated $2 billion in annual losses from natural disasters, according to the ADB, while the devastating 2022 floods caused more than $30 billion in damage and economic losses, highlighting the growing pressure on the country’s public finances and its ability to recover from extreme weather events.

The Manila-based lender said the financing, approved under the second phase of its Climate and Disaster Resilience Enhancement Program, would help Pakistan access funds quickly following eligible disasters while supporting reforms to strengthen preparedness and risk management.

“When disaster strikes, it is often the most vulnerable communities that are hit hardest,” ADB Country Director for Pakistan Emma Fan said in a statement. “Investing in preparedness can help protect lives and livelihoods, reduce economic losses, and safeguard the development gains Pakistan has worked hard to achieve.”

“This program will support the country in implementing critical reforms to ensure a more resilient future.”

The $500 million package comprises contingent disaster financing facilities under ADB’s policy-based lending, a mechanism designed to make budget support available after qualifying emergencies rather than finance individual reconstruction projects.

The lender said the program would help integrate disaster resilience into Pakistan’s development planning and public investment while strengthening the country’s framework for financing emergency responses.

Pakistan is among the countries most vulnerable to climate-related disasters despite contributing a relatively small share of global greenhouse gas emissions.

Its exposure to floods, droughts and extreme heat has added to economic pressures in a country already grappling with fiscal constraints and the need to rebuild critical infrastructure.