IMF may disburse first tranche of climate loan to Pakistan in ‘about six months’

A view of the International Monetary Fund (IMF) logo at its headquarters in Washington, D.C., U.S., November 24, 2024. (Reuters/File)
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Updated 18 May 2025
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IMF may disburse first tranche of climate loan to Pakistan in ‘about six months’

  • Lender to approve first climate loan payment with the second review of Pakistan’s External Fund Facility program, says source
  • Pakistan’s finance adviser says loan, linked to implementation of key performance indicators, to be released over next 28 months

KARACHI: The International Monetary Fund (IMF) is likely to release the first tranche of its $1.4 billion climate resilience loan for Pakistan “in about six months,” a source with direct knowledge of the development told Arab News on Thursday. 

The IMF last Friday approved a fresh $1.4 billion loan to Pakistan under its climate resilience fund and approved the first review of its $7 billion External Fund Facility program, freeing about $1 billion in cash.

The Washington-based lender is expected to start the Resilience and Sustainability Facility (RSF) funding for Pakistan along with its second review of Islamabad’s EFF program, the source disclosed on condition of anonymity as they are not authorized to speak to media on the matter. 

“With the second review of the EFF, if the [IMF] board approves then they [Pakistan] might get the first tranche of the RSF, ” the source said, adding that the next EFF review is expected to take place “in about six months.”

“For climate financing, nothing will be disbursed now,” they added. 

Pakistan’s finance adviser Khurram Schehzad said the climate loan is not a “one-off payment.”

“The RSF fund will be released gradually over the next 28 months, which is linked to the implementation of 13 KPIs (key performance indicators),” the official told Arab News.

He did not elaborate how much the global lender would release as part of the first tranche.

The RSF will support Pakistan’s efforts in building economic resilience to climate vulnerabilities and natural disasters. The South Asian country has been consistently ranked as one of the worst affected countries due to climate change effects. 

In 2022, Pakistan was devastated by flash floods triggered by unusually heavy rains and the melting of glaciers. The catastrophe killed 1,700 people, displaced more than 30 million others and damaged crops and infrastructure worth $30 billion.

That forced Pakistan last year to request the IMF for the RSF fund to address its vulnerability to climate change.

The IMF on May 9 approved the much-awaited climate loan for Pakistan and disbursed the $1.02 billion as its first tranche under the EFF program on May 13.

The Washington-based lender is scheduled to hold its second EFF review of Pakistan’s economic performance on Sept. 15, Sana Tawfik, the head of research at Arif Habib Ltd., said, citing the IMF’s Pakistan Country Report 2024.

When asked if the next IMF review will be delayed, the source replied in the negative. 

The RSF funds are crucial for Pakistan as its dwindling foreign exchange reserves rose to $10.3 billion last week. This amount does not meet the IMF’s three-month import cover threshold requirement.

In its monetary policy statement on May 5, Pakistan’s central bank said delays in the realization of official inflows coupled with “large debt repayments” weakened net financial inflows into the country till March.

Pakistan, which narrowly averted a sovereign default in 2023 after a last-gasp IMF bailout package, owed about $26 billion debt repayments this year ending June. While most of its foreign debt has been repaid, the country still relies heavily on the IMF’s funds to keep its balance of payment position in check.

The central bank expects the country’s foreign reserves to increase to $14 billion by June “on the back of the expected realization of planned official inflows.”

“This build-up in FX reserves to continue in FY26, based on a moderate current account deficit and improved financial inflows,” the SBP said in its statement.


Three children drown in Rawalpindi pond as Punjab issues fresh flood warning

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Three children drown in Rawalpindi pond as Punjab issues fresh flood warning

  • Urban floods in Chenab, Jhelum and Ravi rivers may affect Lahore, Sialkot and Rawalpindi
  • Heavy rains have killed at least 75 Pakistanis so far and injured 130 in less than two weeks

ISLAMABAD: Three children drowned in a pond in Pakistan’s Rawalpindi district despite a complete ban, authorities said on Monday, as the country’s most populous Punjab province issued a fresh flood warning till July 9.

The latest deaths bring the overall toll from rains and flash floods in Pakistan to at least 75, with another 130 injured in incidents such as electrocutions, house collapses, landslides and drownings since June 26.

The three children, aged between six and 10 years, drowned while bathing in the pond in Kallar Syedan area, according to the Punjab Provincial Disaster Management Authority (PDMA).

“There is a complete ban on bathing in rivers, canals, streams and rainwater drains,” the PDMA said. “Parents are requested to take care of their children and never let them bathe in canals, ponds and rivers.”

Expressed grief over the loss of lives, Punjab PDMA chief Irfan Ali Kathia directed authorities ensure financial assistance to affected families and ordered them to increase patrolling around rivers and ensure the enforcement of Section 144, which prohibits public gatherings for safety, in addition to informing citizens of the temporary ban through pamphlets, notice boards and mosque announcements.

The development came as the provincial disaster authority warned of possible urban floods in Punjab’s Lahore, Gujranwala, Sialkot and Rawalpindi divisions.

“There is a possibility of an unusual increase in the water level in the rivers of Punjab from July 7 till July 9,” the PDMA said, warning of possible deluges in Chenab, Jhelum, Ravi rivers and tributaries.

A high-level flood warning was issued for the Chenab river at Marala, while a medium to high-level flood warning was issued for the Ravi river and in Chenab tributaries, including Bahin, Basantar, Deg, Aik, Palkhu, Bhimber, Halsi and Dora.

Kathia directed authorities to stay vigilant and complete preparations in line with the Punjab chief minister’s orders, according to the PDMA.

Rescue 1122 and emergency control room staff have been placed on high alert, with instructions to ensure fuel availability, evacuate vulnerable areas and set up fully equipped relief camps.

Citizens have been urged to follow safety guidelines, cooperate with authorities during evacuations and contact the PDMA at helpline, 1129, in case of emergency.

Last week, a deadly flash flood in the scenic Swat Valley, caused by a sudden rise in water levels due to monsoon rains, killed 13 tourists.

Pakistan, home to over 240 million people, is consistently ranked among the countries most vulnerable to climate change.

In 2022, record-breaking monsoon rains and glacier melt caused catastrophic floods that affected 33 million people and killed more than 1,700.


Pakistani finmin ties tariff overhaul to $44.9 billion export target in FY26 budget

Updated 07 July 2025
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Pakistani finmin ties tariff overhaul to $44.9 billion export target in FY26 budget

  • The development comes weeks after Pakistan unveiled its tariff policy to enhance its exports to $44.9 billion this fiscal year
  • Separately, the finance adviser announces an early retirement of Rs500 billion loan owed by the government to the central bank

ISLAMABAD: Pakistan’s Finance Minister Muhammad Aurangzeb has stressed the significance of sustained tariff reform as a cornerstone of Pakistan’s trade policy, the finance ministry said on Monday, as the country aims to boost exports, streamline imports and maintain a sustainable current account deficit.

The statement came after Aurangzeb chaired a meeting of a steering committee for the implementation of the National Tariff Policy, which aims to create a predictable, transparent and investment-friendly tariff structure by facilitating duty-free access to raw materials, phasing out additional customs and regulatory duties, and supporting nascent and green industries to pave the way for innovation, employment generation and sustained economic growth.

Pakistan has set an export target of $44.9 billion in the budget for this fiscal year that began on July 1, with $35.3 billion for goods and $9.6 billion for services sector. The government has proposed a target of $65.2 billion for goods imports, while it expects the imports of services to reach $14 billion, with the overall import volume significantly higher than export figures.

Speaking at Monday’s meeting, the finance minister highlighted that the steering committee was continuously monitoring progress of the tariff policy implementation, state of the country’s foreign exchange reserves, and guiding the transition of domestic industry, according to the finance ministry.

“The National Tariff Policy represents a five-year roadmap toward liberalizing trade, fostering export-led growth, and enhancing industrial competitiveness,” he was quoted as saying by the ministry.

During the meeting, the National Tariff Commission (NTC) outlined its pivotal role in safeguarding domestic industry through rational tariff structuring and trade remedy actions against unfair trade practices, including dumping, subsidized imports and harmful import surges.

The commission apprised the participants of its efforts to bolster institutional capacity, including organizational reforms, targeted technical training, automation of internal processes, establishment of a dedicated facilitation center for exporters, and initiatives to enhance legal and analytical capabilities to strengthen service delivery.

The finance minister urged the commission to ensure a level playing field for local producers, with the participants resolving to fully implement the National Tariff Policy to reinforce Pakistan’s trade competitiveness and industrial development.

Pakistan, currently bolstered by a $7 billion International Monetary Fund (IMF) program, unveiled the tariff policy last month to enable local industries to “scale, compete globally and shift toward higher value-added exports.” Key sectors expected to benefit include textiles, engineering, pharmaceuticals and information technology, with the policy designed to lower production costs and attract businesses.

Separately, Khurram Schehzad, an adviser to the finance minister, said the government had retired Rs500 billion ($1.7 billion) loan to the central bank early, with the overall early paydowns reaching Rs1.5 trillion.

“Early debt retirement while converting shorter-tenure with longer-tenure debt, significantly reduces concentration risk, lowers future liabilities, and strengthens the country’s macroeconomic foundations by curbing reliance on borrowing,” he said on X.

“This latest achievement builds on an earlier milestone — the successful buyback of PKR 1 trillion in market debt completed by December 2024 — the first such operation in Pakistan’s history. Combined, these two strategic actions amount to the early retirement of PKR 1.5 trillion in public debt in FY25, sending a strong signal of economic confidence and reform.”

He said these early repayments and smart refinancing, capitalizing on the significant decline in interest rates with the government’s disciplined borrowing, led to a staggering Rs830 billion in interest cost savings in the outgoing fiscal year that ended on June 30.


Pakistan officials in Dubai for two-day exchange on innovation in governance, service delivery 

Updated 07 July 2025
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Pakistan officials in Dubai for two-day exchange on innovation in governance, service delivery 

  • Visit aims to boost cooperation with UAE on governance, competitiveness, reform
  • Pakistan, UAE share longstanding ties underpinned by strong people-to-people ties

ISLAMABAD: A senior delegation of Pakistani government officials is in Dubai this week to participate in a two-day experience exchange program aimed at learning from the UAE’s governance and public sector innovation models, Pakistan’s embassy in Abu Dhabi said on Monday.

The program, running from July 8–9, includes sessions with various UAE ministries and authorities and focuses on innovative approaches to public service delivery, competitiveness, and institutional reform. The initiative comes as Islamabad seeks to modernize its public sector and strengthen economic cooperation with the Gulf nation.

On the sidelines of the visit, Pakistan’s Ambassador to the UAE, Faisal Niaz Tirmizi, met on Monday with Abdulla Nasser Lootah, UAE Deputy Minister of Cabinet Affairs for Competitiveness and Experience Exchange. Both sides reaffirmed their commitment to deepening collaboration in governance, reform, and digital public services.

“The Ambassador extended appreciation to the UAE Government for hosting a visiting delegation of senior Pakistani government officials,” the embassy said in a statement after Tirmizi’s meeting with Lootah.

The envoy also conveyed his gratitude on behalf of the Pakistani delegation “for the opportunity to engage in constructive dialogue” with UAE colleagues. 

He also praised the Emirates for fostering “a model of inclusive development and harmony that embraces people from across the world, including the large and vibrant Pakistani diaspora.”

The ambassador noted that Prime Minister Shehbaz Sharif had shown “strong interest in learning from the UAE’s successful tax automation systems to enhance Pakistan’s domestic tax collection capacity” and had directed the visiting team to fully benefit from the opportunity for knowledge-sharing.

For his part, Lootah reaffirmed the UAE’s commitment to “seamless cooperation with Pakistan,” particularly in governance and innovation, the embassy statement said. He also stressed Pakistan’s potential across multiple sectors and said mutual learning could help both countries develop forward-looking policy solutions.

Pakistan and the UAE share longstanding ties underpinned by strong people-to-people connections.

More than 1.8 million Pakistanis live and work in the Emirates, which is Pakistan’s third-largest trading partner after China and the United States, and the second-largest source of remittances after Saudi Arabia.


Survivors grieve, worry about future after deadly building collapse in Pakistan

Updated 07 July 2025
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Survivors grieve, worry about future after deadly building collapse in Pakistan

  • The five-story building collapsed in a crowded area where many working-class and poor families live in aging apartment blocks
  • The site is now a tangle of twisted metal, shattered concrete and scattered belongings, schoolbooks, shoes and sewing machines

KARACHI: Survivors of a building collapse that killed 27 people in the Pakistani city of Karachi were trying on Monday to come to terms with the loss of loved ones and their homes.

The five-story building collapsed on Friday in the overcrowded inner-city Lyari district where many working-class and poor families live in aging apartment blocks. The site is now a tangle of twisted metal, shattered concrete and scattered belongings, schoolbooks, shoes and sewing machines.

On Monday, rescue officials said the death toll had reached 27 and dozens of people were being housed in makeshift shelters following the building’s collapse and the evacuation of nearby buildings over structural fears.

“I grew up in that building. I knew everyone who lived there,” said Imdad Hussain, 28, a fisherman who lost neighbors, childhood friends and seven members of his extended family.

Members of the media report from the ground near a five-storey residential building that collapsed on Friday, July 4, in Karachi, Pakistan, on July 7, 2025. (REUTERS)

He is now sheltering with relatives, and family members are in mourning as they try to figure out what the future holds.

“We’ve lost our home, our people. I don’t know how we’ll start again,” he said.

Officials in Karachi, the capital of the southeastern province of Sindh, said the building had received multiple evacuation notices since 2023, including a final one in late June.

Saeed Ghani, Provincial Minister of Sindh for Local Governments, said the Karachi commissioner — who oversees the city administration — had been tasked with inspecting 51 buildings identified as “extremely dangerous” to prevent similar collapses.

Personal belongings lie amid the rubble of a five-storey residential building that collapsed on Friday, July 4, in Karachi, Pakistan, on July 7, 2025. (REUTERS)

BUILDING SHOOK VIOLENTLY

Residents said the building in Lyari, which has been home to generations of working-class families from minority and migrant backgrounds, shook violently on Friday before collapsing in a cloud of dust.

Rescue workers had been digging through the debris since Friday but declared the search over late on Sunday.

They said about 100 residents from 12 families had been living in the building, and nearly 50 more families had been displaced after three neighboring buildings were declared unsafe and evacuated.

A duck walks near the pile of rubble and belongings after a five-storey residential building collapsed on Friday, July 4, in Karachi, Pakistan, on July 7, 2025. (REUTER)

Lakshmi, a school janitor who lived next door to the collapsed building, said her sister had lived in the building that came down and called moments before it fell to say it was shaking.

Her sister survived, but Lakshmi feared losing the gold she had left with her for safekeeping before her daughter’s wedding.

“We got out with our lives, but everything else is gone, with no certainty about what is to come,” Lakshmi said.


Pakistan confiscates 18 lions kept as pets in crackdown after attack

Updated 07 July 2025
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Pakistan confiscates 18 lions kept as pets in crackdown after attack

  • Official says there are 584 lions and tigers in homes and breeding farms in Pakistan’s most populous Punjab province
  • Keeping exotic animals as pets has been fueled by social media, with owners often showing them off as status symbols

LAHORE: Eighteen lions kept illegally as pets have been confiscated in Pakistan’s Punjab region, authorities said on Monday, as they launched a crackdown after one escaped from a house and attacked a woman and two children.

The woman suffered scratches and bruises, and the two children, aged five and seven, were hospitalized after the attack last week but their injuries were not life-threatening, provincial wildlife officials said.

The lion, which was kept without a license in a house in Lahore, was confiscated and sent to a local safari park, said Mubeen Elahi, director general of the provincial Wildlife and Parks Department. The owner was later arrested, police said.

Keeping exotic animals as pets has been fueled by social media, with owners often showing off their animals online as status symbols.

“According to the new regulations for keeping big cats, no individual is allowed to keep a lion without a license, without adhering to the required cage size, and without following other standard operating procedures,” Elahi said.

The punishment is up to seven years in jail.

As well as confiscating the 18 animals, the department raided 38 lion and tiger breeding farms and arrested eight people for violating the rules, he said, adding that all farms will be inspected by the end of this week.

There are 584 lions and tigers in homes and breeding farms in Punjab, Pakistan’s most populous province, he said.

“I know plenty of people who keep big cats as pets,” said Qaim Ali, 30, who himself had a lion but sold it after it attacked his nephew.

“Most of them are not interested in breeding but keep them as a symbol of power and influence in society.”