IMF urges Pakistan to prioritize climate resilience, accelerate green reforms

The International Monetary Fund (IMF) has called on Pakistan to intensify efforts to confront the escalating impacts of climate change by prioritizing climate-resilient projects in its upcoming development budget.

Speaking at the Sustainable Development Policy Institute (SDPI) conference in Islamabad, Maher Beneki, IMF’s Resident Representative for Pakistan, warned that climate change poses severe threats to Pakistan’s economy and society, urging the country to act “more urgently than ever” to safeguard its people and infrastructure.

Beneki said Pakistan could access up to $1.4 billion in funding through 2027 under the IMF’s Resilience and Sustainability Facility (RSF)—a program designed to help vulnerable economies strengthen their climate response. The facility will support projects focused on resilience-building, water management, and sustainable economic transitions.

He noted that Pakistan’s growing vulnerability to floods, droughts, and heatwaves underscores the urgent need for coordinated national and provincial action. “Pakistan must enhance its climate-related spending at all levels to ensure long-term sustainability,” Beneki said, welcoming the government’s introduction of a carbon levy as a step toward cutting emissions and promoting greener industries.

Water security and development priorities

Beneki highlighted water resource management as a cornerstone of climate resilience, urging policymakers to prioritize projects that improve storage and efficiency in the next fiscal year. Such investments, he said, would not only mitigate climate risks but also stimulate sustainable growth and create green jobs.

The IMF official emphasized that the first tranche of RSF funding is expected to be released by December, contingent upon Pakistan’s progress in improving transparency and integrating climate finance into its Public Sector Development Programme (PSDP).

Mobilizing climate finance

At the same conference, Finance Minister Muhammad Aurangzeb warned that climate change and rapid population growth pose “existential threats” to Pakistan’s future, calling for urgent efforts to mobilize climate finance. Speaking during a plenary session titled “Mobilising Finance for a Circular, Climate-Resilient South Asia,” he stressed that climate finance is now a global imperative.

Aurangzeb said Pakistan must reform its fiscal and regulatory frameworks to attract sustainable investment and integrate climate resilience into economic planning. He underlined the need for private sector participation and innovative financing instruments to accelerate the transition toward a low-carbon, climate-resilient economy. “Digital platforms and fintech can become key enablers of climate-related innovation,” he added.

The conference, attended by regional policymakers, development experts, and financial institutions, focused on aligning South Asia’s growth strategies with climate adaptation goals.

Coordinating global and local support

Samuel Rizk, UNDP’s Resident Representative in Pakistan, said international financial institutions are already extending significant support to Pakistan for climate development financing. He noted that ensuring effective coordination between government agencies and UN partners is critical to maximizing the impact of available funds.

Rizk also urged Pakistan to focus on disaster preparedness, noting that proactive planning is essential to minimize losses from climate-induced disasters such as floods.

Beneki concluded that addressing climate risks is not only an environmental obligation but an economic necessity for Pakistan’s long-term stability and growth.