The government gave the go-ahead to borrow $750 million, equal to Rs 209 billion, from the Asian Development Bank for pension reforms and a public-private partnership programme as Pakistan's total debt and liabilities near Rs 100 trillion.
The loan package comprises $500 million (Rs 139 billion) for pension reforms and $250 million (Rs 70 billion) to promote sustainable public-private partnerships. A concept clearance committee chaired by Deputy Chairman Planning Commission Ahsan Iqbal approved the measures, officials said.
Pension Reforms Loan Targets Rising Liabilities
The $500 million pension component seeks to boost fiscal sustainability, governance, administration and service delivery in the federal pension system. Goals include cutting existing pension liabilities, launching a defined-contribution scheme and raising employee engagement.
The Finance Ministry warned the committee that growing pension outlays and long-term liabilities are squeezing fiscal space for health, education, infrastructure, climate resilience and social protection. The committee asked for a report on outcomes from an earlier pension-reform project.
Planning Commission Seeks Results From Previous Loans
The Planning Commission requested details on earlier pension-reform loans, which the Finance Ministry said it would provide later. Ahsan Iqbal instructed that tangible results from the prior project be tied to the new programme's objectives.
He also urged that fiscal stabilization achieved through borrowed budget support be used to raise funding for the Public Sector Development Program and to back sustainable growth and job creation.
$250 Million Loan Approved for PPP Program
The committee gave the nod to a $250 million loan aimed at strengthening the legal and institutional framework for public-private partnerships at the federal level, improving public investment and financial management.
Of this amount, $200 million will come through relatively expensive financing, while $50 million will be offered on concessional terms.
Pakistan previously borrowed $250 million to set up the legal framework, policies and institutional capacity for PPPs, including changes to the Public Private Partnership Act, 2017. The Planning Commission suggested an impact assessment of that loan and asked for a larger share of concessional financing.
Pakistan's Public Debt Nears Rs. 100 Trillion
The Finance Ministry noted that about half of Pakistan's ADB portfolio is funded through relatively expensive borrowing, and that concessional funds have already been earmarked for other projects. Raising the concessional portion of the new loan would affect financing for those projects.
The State Bank of Pakistan reported that total debt and liabilities reached almost Rs 100 trillion in June 2026, including Rs 86.7 trillion in public debt. Public debt accounted for 68.3 percent of GDP, above the limit set by the Fiscal Responsibility and Debt Limitation Act.
Gross financing needs are estimated at over 20 percent of GDP, according to the Finance Ministry's annual borrowing plan. Negotiations with the Manila-based ADB continue, with procedural details to be finalized after the committee's formal minutes are issued.
