ADB approves $554m flood rehabilitation fund for Pakistan

By Muhammad JuniadPublished On 06 Jan 2023

The Asian Development Bank (ADB) on Monday announced that its board had approved a $554 million financial package, including new and reallocated funds, to spur flood rehabilitation and reconstruction efforts.

ADB’s Emergency Flood Assistance Project will also incorporate climate and disaster resilience measures into the design of the infrastructure.

In a statement issued by the bank on Monday, it said that the financing includes a $475 million loan and a $3 million technical assistance grant from the Asian Development Bank (ADB), and a $5 million grant from the Japanese government to support the restoration of irrigation, drainage, flood risk management, on-farm water management, and transport infrastructure in the flood-affected provinces of Balochistan, Khyber Pakhtunkhwa, and Sindh.

As part of the package, the ADB said that they have repurposed an additional $71 million from existing loans to support the government’s flood-response efforts.

“This year’s floods, which affected 33 million people and brought enormous damage to infrastructure and agriculture, are a devastating reminder of Pakistan’s acute vulnerability to climate change,” said ADB Director General for Central and West Asia Yevgeniy Zhukov.

“This project will help to rebuild critical infrastructure in affected areas and restore rural livelihoods.”

The financial institution said that a post-disaster needs assessment conducted by the government and development partners, including ADB, estimated the total damage and losses of Pakistan at more than $30 billion and recovery and reconstruction needs at $16.3 billion.

What will the loan do?

The loan provided by ADB is expected to go towards the reconstruction of about 400 kilometers (km) of roads; about 85 km of the N-5 – the country’s busiest national highway; and about 30 bridges.

It will also help to restore and upgrade irrigation and drainage structures including canals and on-farm water facilities to restore livelihoods, and strengthen flood risk management structures to mitigate future risks to agricultural land, communities, and assets.

Poverty warning

The bank warned that the floods could precipitate an economic situation where more people fall into poverty with a food security crisis set to emerge.

“More people are expected to fall into poverty as a result of the floods and the food-insecure population is likely to double to more than 14 million people in the most affected districts,” said ADB Principal Transport Specialist Zheng Wu.

“In close coordination with the government and other development partners, this project will provide crucial support to restore agriculture and other priority infrastructure to support socioeconomic recovery from floods,” he said.

Funded through the Japan Fund for Prosperous and Resilient Asia and the Pacific, the $5 million grant will support staple crop cultivation in Balochistan and provide at least 60,000 farm households with higher quality, certified rice seeds for increased productivity over 54,000 hectares of land.

The grant will also support women’s livelihoods in agriculture by providing farming equipment.

The $3 million technical assistance grant will support the implementation of the project and the preparation of an ensuing flood risk management investment.

In October, the ADB approved a $1.5 billion loan to support the government’s provision of social protection, food security, and employment to mitigate the adverse impact of cumulative external shocks.

The program partly contributes to the flood response given that a portion of the program beneficiaries are also flood victims.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.