ISLAMABAD: The Asian Development Bank (ADB) has approved a $500 million policy-based loan to bolster climate change adaptation and disaster risk reduction efforts in Pakistan.
The Climate and Disaster Resilience Enhancement Program (CDREP) aims to enhance Pakistan’s institutional capabilities for planning, preparedness, and response.
It seeks to promote inclusive investments in disaster risk reduction and climate resilience, while also expanding disaster risk financing through a layered risk management approach.
As one of the most vulnerable countries in Asia and the Pacific to climate change and natural disasters, Pakistan faces average annual losses exceeding $2 billion from such events.
Women and other marginalized groups are particularly affected by these challenges.
“This program builds on ADB’s longstanding efforts in Pakistan to mitigate climate and disaster risks and improve disaster response,” stated ADB Director General for Central and West Asia Yevgeniy Zhukov.
“We are proud to support an integrated approach to climate and disaster risk management, including a suite of disaster risk financing instruments for timely and adequate funding during emergencies.”
The program will enhance the country’s capacity for disaster risk mapping and modeling, improving investment and development decisions.
It will also strengthen coordination for disaster monitoring and response and prioritize gender-sensitive and resilient public investments, including integrated flood risk management and nature-based solutions.
Moreover, the program will facilitate mobilization of climate finance from both public and private sources, including the issuance of a domestic green sukuk (Islamic bond).
A key innovation is the introduction of ADB’s Contingent Disaster Financing option, which will provide rapid budget support in the aftermath of a disaster.
Additionally, the program will establish a solidarity fund to promote risk transfer solutions, such as agricultural insurance, and will support shock-responsive social protection mechanisms to deliver cash assistance during disasters.
ADB has also approved a technical assistance grant of $1 million to aid in the program’s implementation.
Since becoming a founding member in 1966, ADB has committed over $52 billion in loans, grants, and financing to promote inclusive economic growth and enhance Pakistan’s infrastructure, energy, food security, transport networks, and social services.
ADB is dedicated to fostering a prosperous, inclusive, resilient, and sustainable Asia and Pacific while continuing its efforts to eradicate extreme poverty. Established in 1966, it is owned by 69 members, 49 of which are from the region.