Manila: The Asian Development Bank (ADB) has sanctioned a $500 million policy-based loan aimed at bolstering climate change and disaster resilience initiatives in Pakistan. The loan is part of the Climate and Disaster Resilience Enhancement Program (CDREP) which seeks to fortify Pakistan’s institutional frameworks for planning, preparedness, and response, while also promoting inclusive investment in disaster risk reduction and climate resilience.

According to Asian Development Bank, the CDREP will focus on several key areas, including disaster risk mapping and modeling, improved coordination for disaster monitoring and response, and the prioritization of gender-sensitive and resilient public investments. The program also emphasizes the importance of mobilizing climate finance from both public and private sources, with innovations such as the issuance of a domestic green sukuk (Islamic bond) and the use of ADB’s Contingent Disaster Financing option, which is being implemented for the first time in the Central and West Asia region.

The initiative highlights Pakistan’s vulnerability to climate change and natural disasters, where average annual losses from such events exceed $2 billion. The program aims to address these challenges by supporting disaster risk financing instruments and facilitating the establishment of a solidarity fund for risk transfer solutions, such as agriculture insurance. It also includes provisions for shock-responsive social protection to deliver cash assistance in the event of disasters.

Additionally, ADB has approved a technical assistance grant of $1 million to aid in the program’s implementation. Pakistan, a founding member of ADB, has been a recipient of over $52 billion in funding from the bank since 1966, aimed at fostering inclusive economic growth and enhancing infrastructure, energy, food security, and social services.

ADB’s commitment to building a prosperous, resilient, and sustainable region remains steadfast as it continues its efforts to alleviate extreme poverty in Asia and the Pacific. The bank, established in 1966, is comprised of 69 members, 49 of which are from the region.