The Asian Development Bank (ADB) on Friday approved a $400 million concessional loan to support the reconstruction of houses and community infrastructure in Sindh damaged by the devastating floods in 2022, a press release from the bank said.

Triggered by torrential monsoon rains, the 2022 floods submerged one-third of Pakistan. The deluge affected over 33m people and killed 1,700 or more. Nearly 8m people were displaced, with many still living in tents and makeshift homes.

According to the press release, the concessional loan will allow the Sindh Emergency Housing Reconstruction Project to rehabilitate flood-damaged houses and community infrastructure, and support livelihood recovery, with a focus on strengthening community resilience against climate change-induced natural hazards.

The press release said the project would support conditional cash grants for the reconstruction of 250,000 houses with multi-hazard resilient and environment-responsive designs.

“It will also support community-driven construction of infrastructure such as drinking water facilities, sanitation facilities, covered drainage, and renewable energy solutions for 100,000 households in around 1,000 flood-damaged villages in Sindh.”

The project will also support conditional cash grants for livestock, agriculture, small enterprises and e-commerce, it said.

The bank said the project was a “key part of ADB’s multifaceted response” to the country’s flood crisis and formed part of the bank’s commitment to provide $1.5 billion in total assistance from 2023 to 2025 to accelerate Pakistan’s flood recovery.

“This project will help rebuild homes and communities, and restore livelihood and basic services in Sindh, the province most affected by the devastating 2022 floods,” said ADB Director General for Central and West Asia Yevgeniy Zhukov.

“It is part of ADB’s extensive support to help Pakistan recover from the disaster which affected 33 million people and damaged houses and infrastructure across the nation,” he added.

The ADB said Sindh suffered about 83 per cent of the total housing damage inflicted by the 2022 floods, with around 2.1m houses either fully destroyed or damaged.

It added that two years later, the victims still resided in inadequate and temporary shelters lacking essential services such as water, sanitation, and electricity.

“ADB’s support will not only help Pakistan build back better, but it will also promote community-led climate resilience and disaster risk management strategies to better prepare for future hazards,” the press release quoted ADB Director for Water and Urban Development Srinivas Sampath as saying.

“We are coordinating closely with other development partners to support the government’s recovery and reconstruction priorities.”

The ADB said the project also supported the government’s resilient rehabilitation, reconstruction and recovery strategy (4RF), and would follow an integrated and sequential approach so that investments across sectors complemented each other.

“A $500,000 technical assistance grant will further support the government’s operational capabilities in procurement, safeguard compliance, and technical and financial management,” it said.

The bank said it was committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while sustaining its efforts to eradicate extreme poverty.

ADB said in January that it would assist seven countries of Central and West Asia, including Pakistan, to enhance the role of the private sector in the delivery of inclusive, accessible, adequate, affordable, and climate-resilient housing ecosystems that also champion the needs of disadvantaged population groups.

The bank had announced a $180m project to restore forests, drains, and roads in the coastal areas of Sindh in May.

In April, the ADB had said Pakistan’s economic outlook was uncertain, with high risks on the downside, as political uncertainty would remain a key risk to the sustainability of stabilisation and reform efforts.