ISLAMABAD: Pakistan and the Asian Infrastructure Investment Bank (AIIB) on Tuesday signed a $320 million loan agreement for the reconstruction and improvement of critical sections of the N-5 highway — the country’s longest national highway from Karachi to Torkham near the Afghan border.

The loan agreement was signed for “Reconstruction of National Highway N-5 under Pakistan’s Resilient Recovery, Rehabilitation and Reconstruction Framework Project,” amounting to $320.16 million.

The project will cover critical sections of the N-5, which traverses Sindh, Punjab, and Khyber Pakhtunkhwa, serving as a backbone of Pakistan’s transport network.

The loan agreement was signed by Muhammad Humair Karim Kidwai, Secretary, Economic Affairs Division, on behalf of the Government of Pakistan, and Mr Konstantin Limitovskiy, Chief Investment Officer, Public Sector & Project and Corporate Finance (Global) Clients of the Beijing-based AIIB. Federal Minister for Economic Affairs Ahad Khan Cheema also attended the signing ceremony.

A separate project agreement was also signed between the AIIB and the National Highway Authority (NHA).

Pakistan has appreciated its longstanding partnership with the AIIB, which has consistently supported the country’s development sector, the economic affairs minister said.

The minister said the N-5 project would not only strengthen the country’s resilient infrastructure but would also play a significant role in enhancing regional connectivity, trade activities and economic growth.

The EAD secretary emphasised that the N-5 project will further deepen this partnership and strengthen mutual trust and cooperation, while advancing Pakistan’s sustainable infrastructure network.

The N-5 corridor holds immense importance as it connects key regions of Pakistan, enhancing regional connectivity, strengthening sustainable infrastructure, and supporting economic growth across the country, he said.

The chief investment officer of the Asian Infrastructure Investment Bank (AIIB) highlighted the strong development collaboration with the Government of Pakistan and stressed the strategic importance of the N-5 project, noting that it forms part of an international transport corridor.

He said the N-5 reconstruction would be undertaken using modern, green, and climate-resilient design standards with state-of-the-art infrastructure, ensuring efficiency, sustainability, and long-term durability.

The signing marks an important milestone in Pakistan-AIIB cooperation and reflects the shared commitment of both sides toward building resilient infrastructure, enhancing regional connectivity and promoting sustainable economic development, the EAD said in a statement.

The agreement follows a number of AIIB investments in Pakistan. Most recently — supported by the AIIB and Asian Development Bank — Pakistan issued its inaugural Panda bond in China’s onshore capital market, raising $250 million.

In 2019, the AIIB said it would invest over $1 billion in the country.