Pakistan has approved plans to seek $750 million in loans from the Asian Development Bank (ADB) for public-sector pension reforms and a programme to strengthen public-private partnerships (PPPs), as the country’s total debt and liabilities approach Rs100 trillion.
The proposed financing comprises $500 million, equivalent to approximately Rs139 billion, for pension reforms and $250 million, or around Rs70 billion, for promoting sustainable public-private partnerships.
The approvals were granted by a concept clearance committee chaired by Deputy Chairman of the Planning Commission Ahsan Iqbal, according to officials familiar with the meeting.
The proposals are still subject to further procedural steps and negotiations with the Manila-based lender. The committee’s approval does not, by itself, mean that the loans have been finalised or disbursed.
$500 Million ADB Loan Targets Rising Pension Liabilities
The proposed $500 million pension reform programme aims to improve the financial sustainability, governance and administration of Pakistan’s federal pension system.
Its objectives include addressing existing pension liabilities, operationalising a defined contribution pension scheme and improving employee engagement to support the transition towards a more sustainable pension framework.
According to officials, the Finance Ministry informed the committee that rising pension expenditure and long-term obligations were placing increasing pressure on government finances.
The additional burden is limiting the funds available for public services, including healthcare, education, infrastructure, climate resilience and social protection.
The Asian Development Bank has separately listed its Transforming Public Sector Pension Program as a proposed $500 million loan initiative for Pakistan. The programme focuses on developing a sustainable pension system and strengthening oversight of the defined contribution scheme.
Planning Commission Seeks Results From Previous Borrowing
During the meeting, the Planning Commission sought details of the outcomes achieved under an earlier pension reform project before proceeding further with the new programme.
The Finance Ministry reportedly agreed to provide the requested information at a later stage. Ahsan Iqbal directed that measurable results from the previous project be linked to the objectives of the proposed financing.
He also called for fiscal savings achieved through budget-support borrowing to help expand allocations for the Public Sector Development Programme (PSDP), with the stated aim of supporting economic growth and job creation.
The review of earlier borrowing is significant because the effectiveness of the proposed programme will depend on whether it produces measurable improvements in pension management and reduces long-term pressure on public finances.
$250 Million Loan Proposed for Public-Private Partnerships
The committee also approved a proposed $250 million loan to strengthen the legal and institutional framework for public-private partnerships at the federal level.
The programme is intended to improve public investment management and public financial management, while creating a stronger framework for involving private investors in infrastructure and other public-sector projects.
Of the proposed financing, $200 million would be provided through relatively expensive lending, while $50 million would carry concessional financing terms.
Pakistan previously received a $250 million ADB loan for its public-private partnership framework. The lender’s official programme details identify the earlier initiative as an effort to strengthen the legal, policy and institutional foundations for PPP projects.
The Planning Commission has called for an assessment of the earlier programme’s impact and recommended increasing the concessional portion of the proposed financing.
However, the Finance Ministry reportedly informed the committee that around half of Pakistan’s ADB portfolio was financed through relatively expensive lending, while available concessional resources had already been allocated to other projects.
Increasing the concessional share of the new loan could therefore affect financing available for those initiatives.
Pakistan’s Debt and Liabilities Approach Rs100 Trillion
The proposed borrowing comes as Pakistan faces substantial public debt and financing requirements.
According to figures attributed to the State Bank of Pakistan, the country’s total debt and liabilities reached nearly Rs100 trillion in June 2026, including public debt of Rs86.7 trillion.
Public debt was equivalent to 68.3% of gross domestic product (GDP), exceeding the sustainable limit cited under the Fiscal Responsibility and Debt Limitation Act.
The State Bank of Pakistan’s economic data portal provides official debt and liabilities statistics for tracking the country’s borrowing position.
Pakistan’s gross financing requirements are estimated at more than 20% of GDP, according to the Finance Ministry’s annual borrowing plan. These requirements reflect the government’s substantial need to finance existing obligations and meet its budgetary needs.
The proposed ADB loans are intended to support pension system changes and strengthen the framework for public-private investment. Their longer-term fiscal impact will depend on the financing terms, implementation of the reforms and the measurable results achieved.
The government is expected to proceed with further formalities after the committee’s minutes are issued and negotiations with the ADB advance.
