ISLAMABAD – Pakistan has secured a $1 billion financing agreement with the Asian Development Bank (ADB), marking its re-entry into Middle Eastern financial markets after a hiatus of over three years.
The five-year multi-tranche facility, signed on Tuesday in Islamabad, combines Islamic and conventional financing instruments to support Pakistan’s economic recovery.
The Ministry of Finance said the deal highlights renewed international confidence in Pakistan’s economic reforms and fiscal management. Backed by ADB’s policy-based guarantee, the agreement aims to attract additional funding from a consortium of regional and global financial institutions, including Dubai Islamic Bank, Standard Chartered, Abu Dhabi Bank, Sharjah Islamic Bank, Ajman Bank, and Habib Bank Limited.
Around 89% of the funds will come through Islamic finance channels, with the remaining 11% from conventional sources. The financing will strengthen Pakistan’s budget position and liquidity amid ongoing economic challenges.
Officials emphasized that ADB’s participation is a strong vote of confidence in Pakistan’s economic direction, signaling improved market trust and paving the way for further multilateral support.
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Economists say the deal represents a strategic shift in Pakistan’s external borrowing policy, focusing on diversifying financing sources and deepening ties with Middle Eastern banks, which may help ease short-term fiscal pressures and support long-term economic stability.
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