ISLAMABAD: The Asian Development Bank (ADB) has approved a $500 million policy-based loan aimed at strengthening climate change adaptation and disaster risk reduction efforts in Pakistan.
The Climate and Disaster Resilience Enhancement Program (CDREP) is designed to improve Pakistan’s institutional capabilities for planning, preparedness, and response to climate-related challenges. It emphasizes inclusive investments in disaster risk reduction and climate resilience while promoting a layered risk management approach for expanding disaster risk financing.
As one of the most vulnerable countries in Asia and the Pacific, Pakistan incurs average annual losses exceeding $2 billion due to climate change and natural disasters, with women and marginalized groups facing the greatest impacts.
“This program builds on ADB’s longstanding commitment to mitigating climate and disaster risks and enhancing disaster response in Pakistan,” said Yevgeniy Zhukov, ADB Director General for Central and West Asia. “We are proud to support an integrated approach to managing climate and disaster risks, including a range of disaster risk financing tools for timely and adequate funding during emergencies.”
The program will improve the country’s capabilities in disaster risk mapping and modeling, enhancing investment and development decisions. It will also strengthen coordination for disaster monitoring and response, focusing on gender-sensitive and resilient public investments, including integrated flood risk management and nature-based solutions.
Moreover, the program aims to mobilize climate finance from both public and private sectors, including the issuance of a domestic green sukuk (Islamic bond). A significant innovation is the introduction of ADB’s Contingent Disaster Financing option, which will provide rapid budget support following a disaster.
The initiative will also establish a solidarity fund to promote risk transfer solutions like agricultural insurance and support shock-responsive social protection mechanisms for delivering cash assistance during emergencies.
ADB has approved a technical assistance grant of $1 million to facilitate the implementation of the program.
Since its inception in 1966, ADB has committed over $52 billion in loans, grants, and financing to promote inclusive economic growth and enhance infrastructure, energy, food security, transport networks, and social services in Pakistan. ADB is dedicated to fostering a prosperous, inclusive, resilient, and sustainable Asia and Pacific while continuing its efforts to eradicate extreme poverty. The bank is owned by 69 members, 49 of which are from the region.
