Pakistan Seeks More ADB Funding for $10bn ML-1 and PPP Projects

ISLAMABAD: Pakistan has asked the Asian Development Bank to expand its financing support for major development initiatives, including public-private partnerships and the $10 billion Karachi-Peshawar Main Railway Line, known as ML-1. The discussions come as Islamabad looks for additional funding mechanisms to advance large infrastructure projects while strengthening cooperation with international development partners.

An ADB delegation headed by Yingming Yang, the bank's vice president for South, Central and West Asia, held meetings in Islamabad with Minister for Economic Affairs Ahad Khan Cheema and Finance Minister Muhammad Aurangzeb. The visit follows the approval earlier this year of ADB's $10 billion Country Partnership Strategy for Pakistan covering the 2026-30 period.

Pakistan has already secured $2 billion from the Manila-based lender for the Karachi-Rohri portion of ML-1, part of the approximately 1,670-kilometre railway corridor. That section is under implementation, while officials are exploring additional ADB facilities that could support other portions of the railway programme as well as projects structured through guarantees and private-sector participation.

During talks with the ADB delegation, Cheema outlined the government's development and reform priorities, including fiscal, structural and governance changes pursued in coordination with institutions such as the ADB, International Monetary Fund and World Bank. The government maintains that these measures have helped improve macroeconomic stability and contributed to stronger sovereign credit assessments.

Cheema presented ML-1 as a national flagship project and told the delegation that privatisation and public-private partnerships remained important elements of the government's economic strategy. Islamabad is working on frameworks designed to improve project implementation and develop a pipeline of commercially viable schemes, while also seeking a larger role for ADB's private-sector operations in Pakistan.

The ADB delegation acknowledged recent improvements in Pakistan's sovereign credit ratings and the government's efforts to strengthen project readiness. Yang also noted Pakistan's use of newer financing approaches supported by the bank, including policy-based guarantees and guarantees connected with Panda bond issuance, as Islamabad attempts to diversify the instruments available for development and external financing.

Railway reforms were another focus of the talks. The ADB vice president indicated that the lender would continue working with Pakistan to maintain momentum on ML-1 and facilitate progress towards an early groundbreaking of the project. He also proposed creating a dedicated working group on institutional reforms in Pakistan Railways, providing a platform for the two sides to address structural issues alongside investment requirements.

In a separate meeting with Finance Minister Aurangzeb, Yang reviewed Pakistan's fiscal management, external account and broader economic conditions. The next stage will involve further discussions over additional financing, private-sector participation and the proposed railways reform mechanism. No final amount for new ADB funding beyond the financing already secured for the Karachi-Rohri section was announced, leaving the scale and structure of further support to be settled through continuing negotiations.