Key Points
- The EIB’s development arm returns to Pakistan after a decade
- EIB Global credit for the Sindh housing project totals €100 million
- Loan of €60 million covers construction of filtration plants to provide drinking water to Karachi
- Projects form part of Global Gateway, the European Union’s external investment strategy for sustainable development
ISLAMABAD: The European Union has approved a $173 million loan for Pakistan to rebuild flood-damaged homes in the southern Sindh province and improve water infrastructure in Karachi.
The commitment marks a return of the European Investment Bank’s international development arm, EIB Global, in Pakistan after a decade, a press release issued by the EU mission to Pakistan said.
Out of the total commitment, $108 million will go toward a major housing programme in Sindh, regarded as the world’s largest ongoing reconstruction effort.
The initiative aims to rebuild approximately 2.1 million rural homes that were damaged by the catastrophic floods of 2022.
With an overall cost of nearly $2 billion, the project is expected to benefit about 40 per cent of rural households in the province.
In addition, $65 million has been allocated to enhance water supply infrastructure in Karachi.
The funding will support the Karachi Water and Sewerage Corporation in constructing two energy-efficient filtration plants in Gharo and Pipri, located east of the city.
These facilities are expected to provide around 300 million litres of clean drinking water daily, meeting the needs of roughly 2.2 million people.
The agreements were announced at a European Union–Pakistan business forum in Islamabad.
“Through our support for the Sindh housing programme and the Karachi water initiative, we are helping Pakistan strengthen climate resilience, improve access to safe drinking water and support inclusive, sustainable development, particularly for the most vulnerable people,” said EIB Vice-President Nicola Beer.
“This also marks an important step as the EIB resumes financing in Pakistan after a decade, reaffirming our commitment to support climate resilience and inclusive recovery.”
“The European Union and Pakistan are building a partnership that delivers real improvement in people’s lives – supporting safe homes and access to clean water for communities in Sindh and Karachi.
Through Global Gateway, we are investing in quality infrastructure to boost long-term health, safety and prosperity,” stated European Commissioner for International Partnerships Jozef Síkela.
“The re-engagement of the EIB in Pakistan is critical for the country to benefit fully from the opportunities deriving from the EU’s Global Gateway strategy,” said EU Ambassador to Pakistan Raimundas Karoblis.
“We are confident that, in the course of the next few years, much more de-risked investments will be agreed between the EIB and Pakistan.”
The housing reconstruction programme in Sindh is also backed by major partners, including the World Bank, the Asian Development Bank, the Islamic Development Bank, and the provincial government.
The rebuilding effort follows a community-driven approach, ensuring that households take an active role in reconstructing their homes.
The programme also incorporates resilience standards designed to protect against multiple or successive disasters, helping communities better withstand future risks.
