ADB approves $500m disaster cover as Pakistan counts $2b annual losses
The Asian Development Bank has approved $500 million in contingent disaster financing for Pakistan, money meant to reach the budget quickly once an eligible disaster strikes. The bank put the stakes in numbers: floods, earthquakes and other disasters cost Pakistan an estimated $2 billion a year on average.
The financing was approved under the ADB's policy-based lending and forms the second subprogramme of its Climate and Disaster Resilience Enhancement Programme. That programme backs reforms to strengthen disaster preparedness and risk management and to fold resilience into Pakistan's development planning and investment, while improving how funds become available after a disaster.
The ADB said the 2022 floods alone caused $14.9 billion in direct damage and $15.2 billion in economic losses, pushing as many as 9.1 million people into poverty. "Poor and rural communities have less capacity to recover, while women and girls are disproportionately affected," the bank said.
"When disaster strikes, it is often the most vulnerable communities that are hit hardest," ADB Country Director for Pakistan Emma Fan said in the statement. "Investing in preparedness can help protect lives and livelihoods, reduce economic losses, and safeguard the development gains Pakistan has worked hard to achieve." Fan said the programme would support Pakistan in implementing "critical reforms to ensure a more resilient future".
The approval follows earlier ADB support under the same programme, including a $500 million policy-based loan in October 2024. In April the government sought a further $1 billion under the programme's second tranche for disaster risk management, flood management and climate-resilient investment. Pakistan's longer-term flood protection has lagged: the Fourth National Flood Protection Plan was delayed in August after the government failed to secure the required funding from domestic and international donors, including the ADB, the World Bank and the Japan International Cooperation Agency.
