ADB approves $500 million loan for Pakistan's climate and disaster resilience

The Asian Development Bank (ADB) has approved a $500 million loan to support climate change and disaster risk reduction in Pakistan.

The Climate and Disaster Resilience Enhancement Program (CDREP) aims to strengthen Pakistan’s capacity for planning, preparedness, and response, increase investment in disaster risk reduction, and scale up disaster risk financing.

Pakistan is highly vulnerable to climate change and natural disasters, with average annual losses exceeding $2 billion. Women and vulnerable groups are especially affected.

ADB's Director General for Central and West Asia, Yevgeniy Zhukov, emphasized the importance of an integrated approach to managing climate and disaster risks.

The program will improve disaster risk mapping, enhance disaster monitoring and response coordination, and support gender-sensitive public investments in flood risk management and nature-based solutions.

It will also mobilize climate finance from public and private sources, including issuing a domestic green sukuk (Islamic bond).

A key feature of the program is the use of ADB’s Contingent Disaster Financing option for the first time in Central and West Asia, providing quick budget support in case of disasters.

Additionally, the program will establish a solidarity fund for risk transfer solutions like agriculture insurance and support shock-responsive social protection to deliver cash assistance during disasters.

ADB has also approved a $1 million technical assistance grant to help implement the program.