IsDB approves $603m for three projects
ISLAMABAD: The 306-kilomtre Sukkur-Hyderabad Motorway (M-6) worth $1.7 billion on Tuesday got a boost after Pakistan and Jeddah-based Islamic Development Bank (IsDB) entered into three financing agreements worth $603 million.
The two sides formally signed three loan agreements totalling about $603 million to finance the M-6 Sukkur-Hyderabad Motorway Project, the Poverty Graduation of Extremely Poor and Flood-Affected Households Project (PGEP), and the Out-of-School Children project for Azad Jammu and Kashmir.
The project agreements were signed by IsDB Vice-President Dr Rami Ahmad and Economic Affairs Division Secretary Muhammad Humair Karim.
Under the agreements, IsDB will provide $475m in financing for the M-6 Sukkur-Hyderabad Motorway, a key link to the proposed Peshawar-Karachi Motorway. Pakistan also signed an agreement with IsDB to launch the Poverty Graduation of Extremely Poor and Flood-Affected Households (PGEP) project, a landmark initiative aimed at transitioning ultra-poor households from dependence on cash assistance to sustainable livelihoods, resilience, and economic self-reliance. PGEP has a total outlay of $134.2m, of which IsDB will contribute $118.4m.
Sukkur-Hyderabad Motorway gets $475m financing
The IsDB approved a $475m loan in October 2025 for the M-6 motorway project to enhance Pakistan’s transport infrastructure by improving connectivity along a key corridor.
The M-6 is the only missing segment in the north-south motorway network linking Karachi to Peshawar.
The project is estimated to cost $1.7bn with six lanes designed for speeds up to 120km per hour. It will include 89 bridges, 15 interchanges, and 243 underpasses. The M-6 is part of the broader Eastern Alignment of the China-Pakistan Economic Corridor (CPEC). The project’s construction is expected to begin in April this year, and land acquisition is currently in the final stage.
The project has faced several delays and financing challenges. The project has increased from $617m in 2018 to $1.1bn in 2022 and now stands at $1.7bn in 2025, mainly due to delays. The Saudi Fund for Development and the Asian Development Bank are other financiers of the project.
The $118m second loan for PGEP will be implemented in 25 districts (20 selected based on the Multidimensional Poverty Index (MPI 2024) and the five most flood-affected districts from the 2022 and 2025 floods). The project aims to reach 160,866 households and create 100,000 employment opportunities through integrated asset transfers, interest-free loans, skills development, rainwater harvesting, climate-smart agriculture, and interventions by business service providers.
The PGEP reflects the Government’s commitment to shifting from consumption-based safety nets to graduation-focused, resilience-driven development, aligned with national priorities and the Sustainable Development Goals, an official statement said.
Furthermore, for the Out-of-School Children project in Azad Jammu and Kashmir, IsDB will provide $10 million, which will help bring about 60,000 out-of-school children back into classrooms and support training for 4,000 teachers.
The IsDB vice-president stated that the bank was keen on expanding cooperation with Pakistan in areas of mutual interest.
Published in Dawn, January 21st, 2026
