Hussain 
An International Monetary Fund (IMF) delegation is scheduled to initiate talks in Pakistan on Monday concerning Pakistan’s application for a $1 billion loan to enhance its climate resilience. This will be followed by a policy review next week to determine the progress made by Pakistan under its ongoing $7 billion Extended Fund Facility (EFF), reports Dawn News.
Pakistan Seeks More Climate Funding
Pakistan had officially asked for $1.2 billion in October last year to assist in combating the effects of climate change. The IMF technical mission will interact with the major government departments, such as finance, planning, climate change, petroleum, water resources, disaster management agencies, and provincial governments.
IMF’s resident representative in Islamabad, Mahir Binici, confirmed that talks will go on for around three weeks. He said an IMF staff team will travel to Pakistan in early to mid-March to carry out a review under the EFF program and to negotiate a potential Resilience and Sustainability Facility (RSF) loan.
Why the Climate Loan is Important
The RSF financing is provided to countries that undertake robust climate resilience reforms. It is a 30-year, 10-year grace period repaid, and is offered with lower interest rates than the traditional IMF loan arrangements.
The IMF has suggested that Pakistan spend 1% of its GDP every year (Rs 1.24 trillion) on climate resilience and adaptation. The intention is to curb the impact of extreme weather, like floods, and maintain economic stability. According to the IMF, such expenditure could cut the adverse effect of climate disasters on growth by one-third while supporting the economy’s faster recovery.
The Cost of Climate Change in Pakistan
Pakistan is one of the most climate-exposed nations globally. Increasing temperatures, glacier melting, intense floods, droughts, and increasing sea levels present grave threats to its economy and people.
Between 1992 and 2021, Pakistan lost $29.3 billion in economic damage from climate disasters—11.1% of its 2020 GDP. The 2022 floods alone:
- Killed 1,700 individuals
- Displaced 8 million individuals
- Added as much as 4 percentage points to poverty
- This resulted in economic losses amounting to 4.8% of Pakistan’s GDP
- Needed reconstruction financing 1.6 times the country’s national development budget
