Climate disasters cost Pakistan $2 billion a year, says new report
$500 million loan received to improve disaster planning and protect vulnerable communities as climate risks mount
ISLAMABAD, Pakistan (MNTV) — Pakistan is losing more than $2 billion annually to climate-related disasters, compounding its already high poverty levels and social vulnerability, according to the Asian Development Bank’s (ADB) 2024 Annual Report released Thursday.
The Manila-based lender described Pakistan as one of the most climate-vulnerable countries in Asia, where disaster events have become both economically and socially devastating.
“Women and vulnerable groups are disproportionately affected,” the report noted.
To address this growing crisis, the ADB approved a $500 million policy-based loan in 2024 to strengthen Pakistan’s capacity for disaster preparedness, response, and long-term risk reduction.
The program includes advanced disaster risk mapping and modelling, mobilization of public-private financing, and improved inter-agency coordination.
Notably, it marks the first time ADB’s contingent disaster financing facility will be deployed in Central and West Asia, allowing for rapid disbursement of emergency funds when disasters strike.
According to Dawn, the report also emphasized the wider development disparities plaguing the region, citing Pakistan, Afghanistan, and the Kyrgyz Republic as countries struggling with persistent poverty and limited access to essential services.
Beyond disaster preparedness, ADB committed an additional $330 million to expand Pakistan’s grassroots social protection programs, aiming to reach 9.3 million people.
The funds will support conditional cash transfers for education, improved health services, and nutrition for women, teenage girls, and children, particularly in disaster-prone regions.
The report also highlighted Pakistan’s strained urban infrastructure, warning that the country’s growing urban population faces deteriorating living standards due to inadequate planning, limited housing, and climate pressures.
ADB published a separate study in 2024 outlining a new urbanization model for Pakistan, focused on resilience, gender-responsive budgeting, and stronger municipal financing frameworks.
In a separate initiative, ADB approved a non-sovereign loan of $41.2 million for SAFCO Venture Holdings Ltd to establish a facility in Sheikhupura, near Lahore, that will produce 200,000 tonnes of sustainable aviation fuel annually.
The facility, which utilizes waste by-products from a nearby biodiesel refinery, is expected to reduce carbon emissions by up to 85 percent and export 100 percent of its output to the European Union—generating valuable foreign exchange for Pakistan.
ADB’s total loan portfolio to Pakistan currently stands at approximately $20.8 billion, including $16 billion in outstanding loans and $4.59 billion in undisbursed commitments—roughly 10 percent of Pakistan’s total external debt.
Regionally, ADB committed $24.3 billion from its resources and $14.9 billion in co-financing in 2024 to support development across Asia and the Pacific.
“With our increased financial firepower and a sharper strategic focus, ADB is turning commitment into concrete results,” said ADB President Masatsugu Asakawa.
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