ISLAMABAD: In a major step toward economic stability and fiscal reform, the Government of Pakistan has signed a USD 300 million loan agreement with the Asian Development Bank (ADB) under the “Improved Resource Mobilization and Utilization Reform Program (Subprogram-II).”
The agreement, signed on June 4, 2025, represents a strategic move to implement deep-rooted structural reforms aimed at enhancing trade efficiency, revenue generation, and capital market development.
The agreement was formally signed by Dr. Kazim Niaz, Secretary of the Economic Affairs Division, and Ms. Emma Fan, Country Director of ADB’s Pakistan Resident Mission.
The signing ceremony was attended by senior government officials and ADB representatives, signaling strong bilateral cooperation and Pakistan’s serious commitment to long-term macroeconomic recovery.
Strengthening Domestic Resource Mobilization
The reform program is designed in a programmatic mode, emphasizing systematic policy actions rather than isolated interventions.
Key areas of focus include increasing the efficiency of tax administration, widening the tax base, improving public financial management, and creating a more investor-friendly environment in capital markets.
These reforms are aligned with Pakistan’s broader macroeconomic strategy to reduce fiscal deficits and increase domestic revenue collection.
Enhanced resource mobilization is expected to reduce dependence on external debt while improving the country’s capacity to finance development projects internally.
Backed by Additional Financing and Guarantees
Alongside the $300 million policy-based loan (PBL), the agreement includes a Policy Based Guarantee (PBG) of USD 500 million, supported by a sovereign counter-guarantee.
This mechanism is expected to unlock an additional USD 1 billion in commercial financing, bringing the total support package to USD 800 million. These combined resources will play a crucial role in Pakistan’s ongoing efforts to achieve macroeconomic stability and fiscal resilience.
