The Asian Development Bank (ADB) approved $800 million programme to strengthen fiscal sustainability and improve public financial management in Pakistan, according to a statement issued by the Philippines-based lender.

The statement read that subprogramme 2 of the “Improved Resource Mobilisation and Utilisation Reform Programme” includes a policy-based loan of $300m, and ADB’s “first ever policy-based guarantee” of up to $500m, which is expected to mobilise financing of up to $1 billion from commercial banks.

“Pakistan has made significant progress in improving macroeconomic conditions,” said ADB country director for Pakistan, Emma Fan.

“This programme backs the government’s commitment to further policy and institutional reforms that will strengthen public finances and promote sustainable growth.”

The programme supports far-reaching reforms to improve tax policy, administration, and compliance, while enhancing public expenditure and cash management.

“It also promotes digitalisation, investment facilitation, and private sector development. These measures aim to reduce Pakistan’s fiscal deficit and public debt, while creating space for social and development spending,” the Manila-headquartered institution said.

The programme is underpinned by a comprehensive support package —including technical assistance and close coordination with development partners — designed to help Pakistan build long-term fiscal resilience and stability, it added.

Khurram Schehzad, adviser to the finance minister, confirmed that the financial institution has approved the programme. “Diplomacy led by Economic Affairs & Ministry of Finance secures majority support at ADB Board,” he said in a post on X.¶ ¶