World Bank to approve $20 billion programme for Pakistan: Report – Times of India

The World Bank is set to approve a $20 billion package for Pakistan, marking the launch of a 10-year initiative to shield development projects from political instability. The programme, “Pakistan Country Partnership Framework 2025-35“, will target crucial areas of improvement in Pakistan’s most neglected sectors, with a focus on long-term, stable development, according to reports from Pakistan-based daily newspaper The Express Tribune.

Key focus areas of the framework

The framework will focus on six areas:

These priorities have garnered broad support across Pakistan’s political spectrum, making them more likely to remain stable throughout the 2025-2035 period, which is expected to include at least three general elections.

Approval from World Bank

The framework is scheduled for approval by the World Bank board on January 14, 2025, following which, the World Bank’s vice president for South Asia, Martin Raiser, is expected to visit Islamabad to discuss the programme’s implementation. This initiative is seen as a long-term solution to protect development projects from Pakistan’s volatile political environment.

Shielding projects from political shifts

According to the World Bank’s assessment, this strategy “will help shield the programme from the country’s volatile polity and frequent swings in priorities and requests that follow government changes.”
The official documents reveal that past transitions in government have led to the “fragmentation of the World Bank portfolio and diluted impacts.” A key official, who was part of the framework development, said that the World Bank picked Pakistan as the first country where it would introduce the 10-year partnership strategy.
Pioneering 10-year partnership
“The World Bank’s total indicative lending envelope for fiscal year 2025 to 2035 will total around $ 20 billion,” as per a draft of the framework quoted by the Express Tribune.
Of this, $14 billion will come from the World Bank’s concessional arm, the International Development Association (IDA), while the remaining $6 billion is expected to be provided through the relatively expensive International Bank for Reconstruction and Development (IBRD).
However, these loans rely on several factors, including the evolution of IDA funding, Pakistan’s performance under the Sustainable Development Finance Policy, and the country’s debt vulnerability indicators.

Private sector lending boost

In addition to the $20 billion in loans to the Pakistani government, the framework also aims to facilitate $20 billion in private sector lending through the World Bank’s two other arms: the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). This brings the total value of the World Bank’s engagement in Pakistan to $40 billion. However, the official loans to the government will remain capped at $20 billion.

Shifting World Bank strategy

This new lending initiative marks a significant shift in the World Bank’s approach. Rather than focusing on smaller, short-term projects, the framework will concentrate on larger, more impactful investments. It will phase out lending to 10 less impactful sectors like transport, power transmission, telecoms, tertiary healthcare, and higher education, which are seen as less impactful in terms of long-term development.
Instead, the World Bank will focus on “larger projects on average, more frequent scale-ups and expansions, and less pilots and one-off operations”, according to the planning document.
Implementation through rolling business plans
The implementation of the 10-year framework will be guided by two-year rolling business plans, which will be agreed upon by both the World Bank and the Pakistani government. By concentrating on long-term, high-impact areas, the World Bank’s new strategy aims to help Pakistan tackle its most pressing socio-economic challenges.