World Bank approves USD 700 million loan for Pakistan: Where the funds will be used?

The approval comes months after the World Bank sanctioned a USD 47.9 million grant in August to improve primary education in Punjab.

Islamabad:

The World Bank has approved USD 700 million in financing for Pakistan under a multi-year initiative aimed at supporting the country's macroeconomic stability and improving public service delivery, media reports said on Saturday.

Where the funds will be used?

According to the lender, the funds will be released under the Public Resources for Inclusive Development–Multiphase Programmatic Approach (PRID-MPA), a framework that could provide up to USD 1.35 billion in total financing, Dawn newspaper reported. Of the approved amount, USD 600 million will be allocated to federal-level programmes, while USD 100 million will support a provincial initiative in Sindh.

The approval follows a USD 47.9 million World Bank grant in August to improve primary education in Punjab.

A separate statement issued by the lender quoted Bolormaa Amgaabazar, the World Bank's country director for Pakistan, as saying, "Pakistan's path to inclusive, sustainable growth requires mobilising more domestic resources and ensuring they are used efficiently and transparently to deliver results for people."

She said that through the MPA, the bank was working with the federal and Sindh governments to "deliver tangible impacts—more predictable funding for schools and clinics, fairer tax systems, and stronger data for decision-making— while safeguarding priority social and climate investments and strengthening public trust".

Investment is being hampered due to political interference

Tobias Akhtar Haque, World Bank lead country economist for Pakistan, said strengthening Pakistan's fiscal foundations was "essential to restoring macroeconomic stability, delivering results and strengthening institutions."

"Through the PRID-MPA, we are launching a coherent nationwide approach to support reforms that expand fiscal space, bolster investments in human capital and climate resilience, and strengthen revenue administration, budget execution, and statistical systems," he said.

"These reforms will ensure that resources reach the front line and deliver better outcomes for people across Pakistan with greater efficiency and accountability," he added.

According to the World Bank, the federal component of the programme will focus on increasing domestic revenues in a fair manner, improving budget planning and implementation, and strengthening data systems to enable evidence-based policymaking. The initiative is also expected to enhance financing for primary healthcare facilities and schools.

In November, an IMF-World Bank report uploaded by Pakistan's finance ministry highlighted that fragmented regulation, opaque budgeting practices, and political capture continue to curb investment and weaken revenue mobilisation in the country.