Islamic Development Bank to fund road, livelihood projects in AJK
ISLAMABAD:
Pakistan and the Islamic Development Bank (IsDB) on Tuesday signed three loan agreements worth about $603 million to finance the M-6 Sukkur-Hyderabad Motorway, Poverty Graduation of Extremely Poor and Flood-Affected Households (PGEP) project and Out-of-School Children project for Azad Jammu and Kashmir.
The agreements were formalised following high-level talks between Minister for Economic Affairs Ahad Khan Cheema and an IsDB delegation, led by Vice President Dr Rami Ahmad. The project agreements were officially signed by IsDB VP Dr Rami Ahmad and Economic Affairs Division Secretary Muhammad Humair Karim. Federal Minister for Economic Affairs Ahad Cheema and Federal Minister for Poverty Alleviation and Social Safety Syed Imran Ahmad Shah were also present.
Under the agreements, the IsDB will provide $475 million for the M-6 Sukkur-Hyderabad Motorway, a key link to the proposed Peshawar-Karachi Motorway. Pakistan also signed an agreement to launch the Poverty Graduation of Extremely Poor and Flood-Affected Households project, a landmark initiative aimed at transitioning the ultra-poor households from dependency on cash assistance to sustainable livelihoods, resilience and economic self-reliance. PGEP has a total outlay of $134.2 million, of which the IsDB will contribute $118.4 million.
The project will be implemented in 25 districts (20 districts selected based on the Multidimensional Poverty Index – MPI 2024 and five most flood-affected districts in 2022 and 2025). The project aims to reach 160,866 households and create 100,000 employment opportunities through integrated asset transfers, interest-free loans, skills development, rainwater harvesting, climate-smart agriculture and business service providers’ interventions.
PGEP reflects the government’s commitment to shifting from consumption-based safety nets to graduation-focused, resilience-driven development, aligned with national priorities and the Sustainable Development Goals.
Furthermore, for the Out-of-School Children project, the IsDB will provide $10 million, which will help bring about 60,000 out-of-school children back into classrooms, besides supporting the training of 4,000 teachers. The IsDB VP stressed that the bank was keen on further expanding cooperation with Pakistan in areas of mutual interest.