Connected Punjab digital financing: World Bank allocates nearly 1/3rd funding to climate projects
ISLAMABAD: The World Bank has classified nearly one-third of the financing for Pakistan’s Connected Punjab digital transformation project as climate finance, allocating USD 22.65 million, or 32.35 percent, of the project’s USD 70 million financing to climate-related interventions under its climate finance assessment framework.
According to the World Bank’s IBRD/IDA Climate Finance Assessment Sheet, the FY2026 project falls under the Digital Development Global Practice and has been assigned USD 22.65 million in total climate finance, highlighting the increasing integration of climate objectives into digital infrastructure and public sector modernisation initiatives.
The assessment shows that climate financing is overwhelmingly geared towards mitigation, with 97.73 percent of the climate allocation linked to mitigation measures, while only 2.27 percent supports adaptation-related activities.
READ MORE: World Bank approves $70mn for Connected Punjab
Among the project’s seven Disbursement Linked Indicators (DLIs), the largest climate allocation has been made to expanding broadband connectivity. The World Bank assigned USD 10 million in climate finance to DLI-2, which focuses on increasing the number of people covered by fixed broadband internet.
The financing has been categorised under Information and Communications Technology (ICT) and Digital Technologies, recognising the role of digital connectivity in reducing emissions and supporting climate-resilient development. Of this amount, USD 9.5 million has been classified as mitigation finance and USD 0.5 million as adaptation finance.
The assessment further allocates USD 1.5 million in climate finance to DLI-5, which aims to establish a regulatory framework for point-of-sale (PoS) system providers in Punjab.
Another USD 5.5 million has been earmarked for DLI-6, supporting the operationalisation of a Digital Invoice Management System (DIMS) in the province, while USD 5 million has been assigned to DLI-7, which seeks to expand the use of digital payment platforms integrated with DIMS across business sectors. All three activities have been categorised as mitigation finance under the ICT and Digital Technologies classification.
In contrast, several core digital development activities received no climate finance allocation. These include DLI-1, which identifies urbanised areas for broadband coverage, DLI-3, which promotes the use of compute-as-a-service for localised artificial intelligence applications, and DLI-4, which measures the number of AI-enabled public and private sector services developed under the project.
The project also includes an Investment Project Financing (IPF) component, of which USD 0.65 million has been classified as climate finance. The allocation consists of approximately USD 0.63 million in mitigation finance and a marginal adaptation component of USD 0.01 million, reflecting the project’s limited direct focus on climate adaptation.
The World Bank noted that climate finance is calculated using the Joint Multilateral Development Banks (MDBs) methodologies for tracking adaptation and mitigation finance.
Under this methodology, total climate finance represents the combined value of adaptation and mitigation investments after adjusting for activities that generate dual climate benefits, thereby avoiding double counting.
Copyright Business Recorder, 2026