Business

ADB plans to provide $86.2mln to Pakistan for sustainable aviation fuel plant

Published by

Staff Reporter

2 years ago

ISLAMABAD: In a recent development, the Asian Development Bank (ADB) and SAFCO Venture Holdings Limited has approved a loan of 86. 2 million to Pakistan as a part of developmental financing package, according to a press release issued by ADB.

According to the details, the fund aims to establish stable aviation fuel reserves in the country. Additionally, a private aviation fuel storage facility is also planned to set up in Sheikhupura, Punjab.

The financing includes collaborative efforts from Manila based lender with aid of $41.2 million, ordinary capital resources (OCR) and, $45 million in syndicated loans including B-loans from The Emerging Africa & Asia Infrastructure Fund—an emerging market infrastructure debt fund owned by PIDG and managed by Ninety-one and ILX—an Amsterdam-based emerging market asset manager focused on SDG and climate private debt strategies.

The loan is part of a framework for climate support that finances infrastructure projects. It is anticipated that the program will lower aviation’s carbon emissions.

Earlier, Pakistan received $500 million from the Asian Development Bank (ADB) under the Climate Change and Disaster Resilience Enhancement Programme (CDREP), the central bank confirmed.

The amount reflected in the State Bank of Pakistan’s (SBP) foreign exchange reserves next week — was released on December 5, 2024 — and will help boost the country’s import cover and stabilize the currency, the SBP said in a statement.

Meanwhile, the foreign exchange reserves increased by $131 million on a weekly basis, clocking in at $11.42 billion as of November 22. While total liquid foreign reserves held by the country stood at $16.08 billion.

Last month, the Asian Development Bank (ADB) approved a $500 million policy-based loan aimed at supporting disaster risk reduction and climate resilience in Pakistan

“The policy-based loan will strengthen Pakistan’s institutional capacity for planning, preparedness, and response to climate-induced disasters. The loan program will increase inclusive investment in disaster risk reduction and climate resilience, and support the scale-up of disaster risk financing using a risk-layered approach,” the Philippines-based said.

The program supports enhanced capacity for disaster risk mapping and modeling for investment and development decisions. It enhances coordination for disaster monitoring and response.

“It supports enhanced planning and prioritization of gender-sensitive and resilient public investments, including integrated flood risk management and nature-based solutions,” the Philippines-based said.

Apart from funding for climate and disaster resilience, the bank also approved a technical assistance grant of $1 million for Pakistan to support the implementation of the program.

According to the Asian lender, the program will support the establishment of a solidarity fund to facilitate the uptake of risk transfer solutions such as agriculture insurance. The program also supports shock-responsive social protection to deliver cash assistance in the event of a disaster.

Staff Reporter