Pakistan is asking the Asian Development Bank for a bigger financing role, and the request comes at a moment when the country needs it. Islamabad wants ADB Pakistan funding to cover both an expanded public-private partnership program and the flagship $10 billion Karachi-Peshawar Main Railway Line, known as ML-1. Officials from the Economic Affairs Division met an ADB delegation this week to lay out what that expanded role could look like.
Background
ML-1 is not a new idea. The 1,670-kilometre corridor linking Karachi to Peshawar has been discussed for more than a decade, originally as a China-Pakistan Economic Corridor project. Chinese financing for the full line never materialized at the scale Islamabad wanted, and the government has spent much of the past two years looking for alternative lenders willing to fund pieces of the corridor in phases.
The Asian Development Bank stepped into that gap. It has already committed $2 billion toward the Karachi-Rohri section, the first phase now under implementation. That section alone covers roughly 480 kilometres of track and forms the starting point for a rebuild that officials hope will eventually reach all the way to Peshawar.
Details
The latest meeting in Islamabad went beyond ML-1 alone. According to officials familiar with the discussion, the Economic Affairs Division raised the idea of newer ADB instruments, including partial credit guarantees and blended finance structures meant to pull private capital into public infrastructure. This is a shift in tone from the earlier years of the project, when the government leaned almost entirely on sovereign loans.
The ADB team was led by its Vice President, and the visit also touched on Pakistan’s broader privatisation agenda. Officials told the delegation that building a credible pipeline of commercially viable projects is now a government priority, not just for railways but for power, water, and urban transport as well.
Railways Reform on the Table
One outcome of the meeting was a proposal to set up a working group focused specifically on railway institutional reform. Pakistan Railways has struggled for years with falling freight revenue and aging signalling systems, and both sides appear to agree that new financing alone will not fix those structural problems. The working group is meant to start relatively soon, though no firm date has been announced publicly.
From CPEC to Multilateral Financing
The Senate has also been told that ML-1 was formally separated from CPEC earlier this year, with the government now pursuing roughly $7.7 billion in financing from the ADB and other multilateral lenders for the sections beyond Karachi-Rohri. That is a meaningful change in how the project is being packaged, and it puts more weight on institutions like the ADB to fill financing gaps that Chinese lending was originally expected to cover.
Quotes
An official readout from the meeting said the ADB side reaffirmed its willingness to work with Islamabad toward an early groundbreaking on the project. The statement also noted that the Pakistani side had highlighted ML-1 as a national flagship project, underlining how central the railway has become to the government’s infrastructure agenda.
Separately, Economic Affairs Minister Ahad Cheema has been publicly firm about timing on the first phase. In comments carried by local media, he described the Karachi-Rohri section as a starter that would move ahead regardless of setbacks. That kind of language suggests the government is treating this as a test case for whether it can deliver a major infrastructure project without Chinese financing driving the process.
Impact
For Pakistan, the stakes go beyond one railway line. A working relationship with the ADB on guarantees and PPP structures could open the door to private capital for other stalled infrastructure projects, at a time when the federal budget has very little room for new sovereign borrowing. Multilateral lenders have also become more important generally as Pakistan tries to diversify away from a heavy reliance on any single bilateral partner.
Regionally, a faster ML-1 could cut freight and passenger travel times along one of South Asia’s busiest north-south corridors, with knock-on effects for the textile export sector, which depends on getting goods from Punjab and Karachi’s ports moving efficiently. Economists have pointed out before that rail modernisation on this scale could also generate a meaningful number of construction jobs, though how many depends heavily on how quickly the later phases actually move from planning into construction.
Conclusion
Nothing here amounts to a signed deal yet. What has changed is the framing: Pakistan is no longer treating ADB support as a supplement to Chinese financing but as one of the main pillars for finishing ML-1 at all. The working group on railway reform, the discussion of new financial instruments, and the push toward the Karachi-Rohri groundbreaking are all pieces of the same story, and the next few months should show whether Islamabad can turn ADB interest into disbursed funds and actual construction on the ground.
FAQs
Who gave 1 billion loans to Pakistan?
Several lenders have provided financing near the $1 billion mark to Pakistan in the recent past, so the answer depends on which facility is being asked about. The International Monetary Fund released roughly $1 billion under the Extended Fund Facility as part of a combined $1.2 billion tranche approved in May 2026, alongside an additional amount under the Resilience and Sustainability Facility. Separately, the Asian Development Bank has structured parts of its ML-1 railway support in similar large tranches, and the World Bank and Islamic Development Bank have also extended billion-dollar-range facilities to Pakistan for budget support and infrastructure over the past few years. Anyone asking this question should specify the lender and the year, since Pakistan has received multiple loans of comparable size from different institutions.
Does Pakistan plan to receive an IMF loan in 2026?
Yes, and in fact Pakistan has already received several disbursements under its ongoing IMF program during 2026. The IMF Executive Board completed the third review of Pakistan’s Extended Fund Facility in May 2026, releasing about $1.3 billion combined across the EFF and the Resilience and Sustainability Facility. A further review was expected later in the year, with IMF staff assessing progress on tax collection, energy sector reform, and fiscal targets before any additional tranche is approved. Pakistan’s 37-month EFF arrangement runs into 2027, so further disbursements tied to future reviews remain likely through the rest of the program period, assuming the government continues to meet the agreed conditions.
Who is funding the ADB?
The Asian Development Bank is not funded by any single country. It is a multilateral development bank owned by its member governments, currently numbering more than 60 countries from within and outside the Asia-Pacific region. Its capital base comes from subscriptions paid in by member states, with Japan and the United States holding the largest individual shareholdings, followed by the People’s Republic of China and India. The bank also raises money on international capital markets by issuing bonds, using its strong credit rating to borrow at favourable rates and then lend that money on to developing member countries like Pakistan for infrastructure and development projects.
