Pakistan, IsDB sign $603 million financing agreements

Islamabad: Pakistan and the Islamic Development Bank (IsDB) on Monday signed three financing agreements worth approximately $603 million to support key infrastructure, social protection and education projects in the country.
The agreements were finalised in Islamabad following high-level talks between Pakistan’s Minister for Economic Affairs Ahad Khan Cheema and an IsDB delegation led by the Bank’s Vice President Dr Rami Ahmad.
The project documents were formally signed by Dr Rami Ahmad and the Secretary of the Economic Affairs Division Muhammad Humair Karim. The signing ceremony was witnessed by Federal Minister for Poverty Alleviation and Social Safety Syed Imran Ahmad Shah, along with senior government officials.

Under the agreements, IsDB will provide $475 million in financing for the M-6 Sukkur–Hyderabad Motorway, a critical segment of the proposed Peshawar–Karachi Motorway network, aimed at improving national connectivity and facilitating trade and economic growth.
Pakistan also signed an agreement to launch the Poverty Graduation of Extremely Poor and Flood Affected Households (PGEP) project. The initiative has a total outlay of $134.2 million, with IsDB contributing $118.4 million, and is designed to help ultra-poor households transition from cash assistance to sustainable livelihoods and economic self-reliance.
The PGEP project will be implemented across 25 districts, including 20 districts selected on the basis of the Multidimensional Poverty Index (MPI 2024) and five districts most affected by the 2022 and 2025 floods. It aims to support 160,866 households and generate around 100,000 employment opportunities through asset transfers, interest-free loans, skills development, climate-smart agriculture, rainwater harvesting and business development services. The programme aligns with national development priorities and the Sustainable Development Goals (SDGs).
In addition, IsDB will provide $10 million for the Out-of-School Children project in Azad Jammu and Kashmir, which is expected to bring around 60,000 children back into classrooms and support the training of 4,000 teachers.
Speaking on the occasion, the IsDB Vice President said the Bank was keen to further expand cooperation with Pakistan in areas of mutual interest. The Minister for Economic Affairs expressed appreciation for IsDB’s continued support, describing the partnership as vital for Pakistan’s long-term development agenda.