SOE reforms, disaster resilience: ADB approves two projects worth $540m

ISLAMABAD: The Asian Development Bank (ADB) has approved two projects totalling USD540 million to accelerate state-owned enterprise (SOE) reforms in Pakistan and enhance disaster resilience in the coastal districts of Sindh.

The financing comprises a USD400 million results-based loan for the Accelerating SOE Transformation Program for Pakistan and a USD140 million concessional loan for the Sindh Coastal Resilience Sector Project.

The SOE reform program marks a significant milestone in Pakistan’s efforts to tackle critical challenges in corporate governance and commercial performance within its SOEs.

“The SOE reform program for Pakistan seeks to improve governance and optimize the performance of Pakistan’s commercial SOEs, which are vital for the country’s economic stability and development,” said ADB Country Director for Pakistan Emma Fan. “The program will also prioritize restructuring and commercialization of the National Highway Authority, one of the largest and most complex entities within Pakistan’s SOE portfolio.”

The program is ADB’s first results-based loan exclusively dedicated to public sector management reform. The bank has been a longstanding partner in supporting Pakistan’s SOE reforms through sector investments, policy operations, and technical assistance. Substantial progress has been achieved over the past five years with ADB’s support, including the enactment of the SOE Act and SOE Policy in 2023, the establishment of a central monitoring unit, and the introduction of public service obligation agreements aligned with international best practices. The results-based approach will facilitate improved corporate governance and drive advancements in institutional capacity, digitalization, road safety, and financial sustainability.

ADB has also approved a complementary technical assistance grant of USD750,000 to provide expertise and capacity-building support, ensuring effective implementation of reforms. These efforts aim to foster a competitive and resilient public sector, stimulate private sector development, and contribute to Pakistan’s long-term, inclusive economic growth.

The Sindh Coastal Resilience Sector Project aims to strengthen disaster resilience in the vulnerable and underserved districts of Badin, Sujawal, and Thatta.

The project is set to improve the lives of over 500,000 people, safeguard 150,000 hectares of agricultural land, and restore 22,000 hectares of forest in Pakistan. These outcomes align with Pakistan’s National Flood Protection Plan IV, Sindh Climate Change Policy, and ADB’s Strategy 2030 priorities on environment and resilience. The project will help reduce greenhouse gas emissions, enhance biodiversity, and improve food security, supporting ADB’s ambition to mobilize USD40 billion for food systems transformation by 2030.

The project is co-financed by a USD20 million grant and a USD20 million concessional loan from the Green Climate Fund through the Community Resilience Partnership Program Investment Fund, administered by ADB.

“The coastal communities in Sindh are increasingly vulnerable to severe natural hazards, including flooding, saltwater intrusion, and water scarcity. This project will protect livelihoods, strengthen food security, and empower women to play a central role in resilience planning and implementation,” said Ms. Fan.

The project, implemented by the Sindh Irrigation Department and the Sindh Forest and Wildlife Department, will integrate resilient water resources infrastructure, nature-based solutions, and improved coastal management. Key investments include upgrading drainage and flood protection systems, restoring mangrove and inland forests, and strengthening monitoring and modeling capacity to support future resilience investments. Community-based resilience plans will ensure locally anchored and inclusive solutions, with at least 25% of funds allocated to initiatives led or undertaken by women. The project complements parallel financing from the International Fund for Agricultural Development, which supports livelihood development in the same districts.

Copyright Business Recorder, 2025