Islamabad: The Asian Development Bank (ADB) has approved a substantial USD 500 million policy-based loan to Pakistan aimed at enhancing the country’s capabilities in climate change adaptation and disaster risk resilience. This strategic funding initiative falls under the newly launched Climate and Disaster Resilience Enhancement Program (CDREP), which will support a broad range of activities to strengthen Pakistan’s institutional and infrastructural resilience.
According to Zameen.Com, the ADB’s CDREP will significantly bolster Pakistan’s disaster preparedness and response mechanisms. The program aims to improve institutional capacities for disaster planning and risk management, enhance investments in disaster risk reduction, and expand financial strategies for managing disasters through innovative and layered risk financing options.
Yevgeniy Zhukov, ADB Director General for Central and West Asia, highlighted the urgency of this support, noting Pakistan’s vulnerability to climate impacts and natural disasters, which on average cost the country over USD 2 billion annually. “We are proud to support an integrated and comprehensive approach to climate and disaster risk management,” Zhukov stated, emphasizing the development of a portfolio of disaster risk financing instruments to ensure timely and adequate disaster response funding.
The CDREP also includes a USD 1 million technical assistance grant from the ADB to aid in the program’s implementation. This will enhance disaster mapping and modeling capabilities, improve the coordination of disaster monitoring systems, and support gender-sensitive and resilient public investments. Among the specific initiatives funded are integrated flood risk management projects and the adoption of nature-based solutions to mitigate disaster impacts.
A key innovation introduced through this program is the ADB’s Contingent Disaster Financing, marking its first application in Central and West Asia. This financing option allows Pakistan to access quickly-disbursing funds for immediate disaster response. Additionally, the establishment of a solidarity fund aims to support the development of risk-transfer solutions, such as agricultural insurance, vital for the nation’s large agricultural sector.
The program also advocates for shock-responsive social protection measures to ensure rapid cash assistance to populations affected by disasters. In a bid to further enhance climate financing, Pakistan plans to issue a domestic green sukuk (Islamic bond), aimed at attracting both public and private investments and boosting climate finance mobilization.
With the launch of CDREP, the ADB reaffirms its commitment to supporting Pakistan in mitigating climate risks and advancing sustainable development through innovative financing and comprehensive preparedness strategies.