ISLAMABAD – Pakistan has inked a $1 billion financing arrangement with the Asian Development Bank (ADB), signaling its return to Middle Eastern financial markets after more than three years.
The five-year multi-tranche facility was signed in Islamabad on Tuesday and combines both Islamic and conventional financing mechanisms.
The Ministry of Finance stated that this agreement underscores the international community’s renewed confidence in Pakistan’s economic reforms and fiscal policies.
Structured with the backing of ADB’s policy-based guarantee, the deal aims to attract funding from a consortium of regional and international financial institutions. These include Dubai Islamic Bank, Standard Chartered, Abu Dhabi Bank, Sharjah Islamic Bank, Ajman Bank, and Habib Bank Limited.
Approximately 89% of the funding will be provided through Islamic financial channels, with the remaining 11% coming from conventional sources. The funds will help bolster Pakistan’s budgetary position and improve liquidity as the country navigates ongoing economic challenges.
According to finance officials, ADB’s involvement has been pivotal in restoring global market confidence in Pakistan. “This is more than just financial assistance—it’s a strong endorsement of Pakistan’s economic direction,” one official noted.
The development also reflects a strategic shift in Pakistan’s external borrowing policy, with increased focus on engaging Middle Eastern banks through diversified financing instruments.
Economists believe the agreement may alleviate short-term fiscal stress and open doors for additional multilateral assistance, aligning with Pakistan’s broader strategy for economic stability, reserve buildup, and investor reassurance.
