
Climate crisis demands collective action
The severe impacts of climate change are becoming more visible and alarming with each passing day. Wildfires in North America, heatwaves across Europe, and catastrophic floods in Asia are stark reminders of a warming planet. Climate change is a reality that is reshaping lives, economies, and ecosystems in real time.
Developing countries are the most vulnerable to the escalating impacts of climate change. For Pakistan, the stakes are even higher. The country is witnessing environmental challenges that threaten its ecosystems, economy, and social fabric. In a recent Country Climate and Development Report by the World Bank, it is estimated that climate-related events can reduce Pakistan's GDP by 18–20% by 2050. These numbers frame a stark reality and set the stage for decisive action.
Over the past two decades, the country has experienced an alarming rise in extreme weather events. In 2022, heavy monsoon rains caused devastating floods, affecting over 33 million people, displacing 3 million, and resulting in over $30 billion in economic losses. Nearly two million homes were destroyed, and millions of livestock were lost. These events revealed not only environmental degradation but also the socio-economic fragility that climate disasters amplify.
According to the World Health Organization, environmental factors contribute to 200 deaths per 100,000 people in Pakistan annually. Further underscoring that outdoor air pollution in Pakistan contributes to around 22,000 premature deaths annually.
This health toll serves as a stark reminder for Pakistan to adopt climate change initiatives and focus on a collective and coordinated response. Public institutions, private companies, and communities must work together to build resilience, reduce emissions, and prepare for the future. The country's public and private sectors have a special responsibility to align their operations with climate resilience goals.
Exploration and Production (E&P) companies in Pakistan are increasingly recognising this responsibility. In December 2023, at the United Nations Climate Change Conference (COP28) held in Dubai, Pakistan's leading Exploration and Production (E&P) companies—OGDCL, PPL, and GHPL—signed the Decarbonization Charter. The accord highlighted their collective commitment to supporting climate change initiatives and aligning business operations with global sustainability goals.
Additionally, OGDCL has adopted several initiatives aimed at reducing its ecological footprint, promoting renewable energy, and supporting local communities. The company has launched a nationwide tree-plantation campaign. In collaboration with academic institutions and community centres across Pakistan, the company has planted thousands of trees to enhance biodiversity, improve air quality, and offset carbon emissions.
Beyond tree plantation, the company is also investing in renewable energy solutions. In Lakki Marwat, the company solarised 30 homes, offering off-grid communities access to clean electricity. Solar water pumping systems have also been installed in six communal sites across the Kharan and Noshki districts of Balochistan, ensuring sustainable water access in water-stressed regions. Furthermore, the company installed a 130 KVA solar system for the Pather Nala water project in Dera Bugti's Pirkoh area to ensure a consistent water supply.
To institutionalize its sustainability vision, OGDCL introduced its Greenhouse Gas (GHG) Emission Policy in 2023 and launched a comprehensive ESG (Environmental, Social and Governance) Strategy 2025. This strategy includes flaring reduction programs, methane leak detection systems, and the establishment of a corporate GHG inventory to set measurable emission reduction targets.
The journey toward climate resilience demands a whole-of-society approach. Governments must lead with policies and incentives. Citizens must reduce consumption and waste. And corporations must integrate sustainability into their business DNA.
As we mark World Environment Day 2025, the message is clear: the time to act is now. It is the collective responsibility of all stakeholders to ensure that we respond with urgency, innovation, and commitment.
(The writer is a student of BSc Environmental Engineering NUST Islamabad)
Copyright Business Recorder, 2025
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Express Tribune
9 hours ago
- Express Tribune
The hidden cost of hefty borrowing
While infrastructure projects have brought critical improvements in energy generation, transport connectivity and logistics, they have also saddled Pakistan with an increasing debt burden. photo: file Listen to article Pakistan's recent move to secure a $3.3 billion loan package from Chinese banks has once again placed its economic dependence on Beijing in sharp focus. The deal, which includes a $2 billion syndicated loan and a $1.3 billion refinancing arrangement, is intended to provide much-needed short-term relief to Pakistan's low foreign exchange reserves. In June 2025, following the disbursement of these funds, the reserves rose to nearly $15 billion, offering a temporary cushion equivalent to about two months' worth of imports. However, beneath the surface of this fiscal reprieve lies a complex web of financial vulnerabilities and strategic risks that could undermine Pakistan's long-term economic sovereignty. China has emerged as Pakistan's largest bilateral lender, with outstanding loans exceeding $29 billion. Much of this lending is linked to infrastructure development under the China-Pakistan Economic Corridor (CPEC), a central component of China's Belt and Road Initiative (BRI). While CPEC projects have brought critical improvements in energy generation, transport connectivity, and logistics, they have also saddled Pakistan with an increasing debt burden. Many of these loans are non-concessional, meaning they carry higher interest rates. Additionally, several Chinese-backed energy projects include capacity payment clauses that obligate Pakistan to make fixed payments regardless of power consumption, leading to billions in annual outflows. This contractual structure places sustained pressure on Pakistan's already overextended public finances. The current loan deal underscores a pattern that has developed in recent years: instead of retiring its obligations, Pakistan has increasingly relied on refinancing maturing Chinese debt. While this approach alleviates immediate liquidity crises, it does little to improve long-term sustainability. Refinancing delays the inevitable, creating a revolving door of repayments that expands the debt stock without addressing underlying structural weaknesses. As Pakistan's access to Western credit diminishes due to poor reform implementation and global risk perceptions, Chinese loans appear increasingly attractive because they are disbursed quickly and without stringent conditions. However, this convenience increases China's leverage over Pakistan – not only economically but diplomatically. The growing financial relationship shapes Pakistan's foreign policy calculus, particularly in matters related to India, the United States, and broader regional alignments. Efforts to diversify external financing have yielded some support. The World Bank recently approved a ten-year, $20 billion support package aimed at structural reform and development financing. Additionally, Pakistan remains under the IMF's Extended Fund Facility, which offers periodic tranches of funding subject to conditions such as tax reform, energy subsidy cuts, and improved fiscal management. Yet successive governments have struggled to meet these reform benchmarks, weakening credibility and leading to repeated interruptions in disbursement. In contrast, Chinese funding is politically less sensitive, often directed at visible infrastructure projects and devoid of institutional scrutiny, which makes it more attractive to policymakers under short-term political pressure. Without internal reforms, external financing — no matter how generous or immediate — cannot create sustainable stability. The challenge is not merely about securing foreign funds but about using those funds to build institutional capacity, diversify the economy, and reduce dependency. Continued borrowing without a parallel commitment to reform merely postpones the crisis and locks Pakistan into a cycle of debt and vulnerability. Moreover, the bilateral nature of Chinese lending can undermine Pakistan's position in global credit markets. Multilateral lenders and private investors closely monitor sovereign debt profiles, and overreliance on one creditor can affect Pakistan's risk rating, borrowing costs, and diplomatic flexibility. Questions around repayment capacity, especially in light of high annual debt servicing requirements, may erode investor confidence and reduce future funding opportunities. The latest $3.3 billion package offers short-term relief but does little to change the fundamentals. It is, in essence, a temporary fix that masks a growing problem. Every loan signed without reform commitments increases Pakistan's exposure to future crises. To move beyond this precarious cycle, Pakistan must take control of its economic trajectory. That means implementing broad-based reforms to expand the tax base, restructure public enterprises, improve energy sector efficiency, and enhance transparency in debt contracting. Only then can external financing serve as a tool for growth rather than a source of dependency. Multilateral lenders may impose tough conditions, but their long-term orientation and oversight mechanisms offer a pathway to resilience that bilateral loans alone cannot provide. In the short run, the Chinese loan provides breathing space and may help avoid immediate balance-of-payments crises. But in the long run, the real question is whether this dependence on a single creditor compromises Pakistan's ability to make independent economic choices. For Pakistan to secure a sustainable future, it must shift from firefighting to reform, from short-term relief to long-term resilience. The time to act is now. The writer is a member of PEC and holds a Master's in Engineering


Business Recorder
a day ago
- Business Recorder
Flood project: Pakistan govt seeks $31m financing boost from World Bank
ISLAMABAD: The government of Pakistan has requested the World Bank for increasing the financing envelope by $31 million as well as restructuring of Integrated Flood Resilience and Adaptation Project. The request was made to better align the project with current implementation capacity, performance of the component and operational their readiness, and a stronger focus on resilience. Official sources revealed that the request was based on series of discussions from between senior management of the World Bank, government of Pakistan, and government of Balochistan. The project development objective (PDO) is to improve livelihoods and essential services and enhance flood risk protection in selected communities affected by the 2022 floods. World Bank rates IFRAP implementation as 'moderately unsatisfactory' The proposed additional financing of $31 million and reallocation of US$54 million from other components will support activities under Component 3 of the Parent Project which will increase impact and expand the provision of multi-hazard resilient housing units and livelihoods in Balochistan. The AF will facilitate increasing funding for the housing subsidy grant to 102,000 beneficiaries from the current 35,100. The Additional Financing (AF) aims to scale up housing reconstruction activities in Balochistan Province, covering additional eligible beneficiaries whose homes were affected by the 2022 floods. The affected households were initially identified through the damage assessment conducted by the Government of Balochistan (GoB) and subsequently by the implementing partners of the Project. The AF also includes a Level 2 Restructuring, which reduces the scope of activities under Components 1 and 4 of the Project. It also modifies the Results Framework (RF) to update indicators and targets, including the addition of a relevant World Bank Group Corporate Scorecard FY24–30 indicator. The restructuring does not include any new types of activities, and the Project Development Objective (PDO) remains unchanged. With this AF, the total Project commitment will increase to US$244 million. The need for AF was identified during the implementation of IFRAP. Balochistan was among the provinces most severely affected by the 2022 floods. The Post-Disaster Needs Assessment estimated damage to the housing sector in Balochistan at over $400 million. To address this challenge, the Parent Project was initiated with $75 million equivalent IDA credit for housing reconstruction. However, a significant financing gap remains to fully rehabilitate the damaged housing units in the province. The revised project description is as follows: 12. Component 1 – Community Infrastructure Rehabilitation. This component will finance the rehabilitation of priority community infrastructure damaged by floods, including irrigation and flood protection infrastructure, roads and bridges located in calamity-declared districts of Balochistan. The guiding principle is to build back better with improved infrastructure based on climate risks, improved engineering design standards, and improved construction and maintenance to enhance resilience. The component will also include the technical assistance needed for the design and supervision of the works and for the development of operation and maintenance of the infrastructure. 13. Component 2: Strengthening Hydromet and Climate Services. This component will enhance the PMD capacity to generate and use hydrometeorological information for decision-making, particularly by expanding coverage in the western region, benefiting Balochistan as well as other parts of the country. While financing remains unchanged, cost escalations have reduced the number of Automatic Weather Stations (AWS) from 300 to 110. To ensure sustainability and impact, deployment will prioritize high-risk areas such as flash flood-prone regions in South Punjab and Sindh, aligning with PMD's operational capacity. 14. Component 3: Resilient Housing Reconstruction and Restoration. This component will finance: (i) resilient housing reconstruction grants to beneficiaries for the reconstruction of core housing units damaged by floods; and (ii) institutional strengthening and technical assistance for the reconstruction. It will also support the objective of improved livelihoods generation in the construction sector and allied subsectors. 15. Component 4: Project Management, Technical Assistance, and Institutional Strengthening. This component will support: (i) project management for the FPMU and the provincial PIUs; (ii) technical assistance for M&E, Project Supervision and Implementation Assistance (PSIA), preparation of SoP2, and preparation of community flood resilience plans; and (iii) institutional strengthening through capacity building and drafting a Water Act. 16. Component 5: Contingent Emergency Response. This component facilitates the provision of immediate response to an Eligible Crisis or Emergency, as needed. Following an adverse natural event that causes a major disaster or emergency, the GoP may request the Bank to reallocate project funds to support response and reconstruction. Resources will be allocated to this component as needed during implementation. 17. Results Framework. There are no changes to the PDO. The RF has been updated in line with the revised project design. The indicator 'people with enhanced protection to flood risk' is revised to align with the corporate scorecard indicator 'people with enhanced resilience to climate risks', including its sub-indicators reporting on youth and women. Copyright Business Recorder, 2025


Business Recorder
a day ago
- Business Recorder
Pakistan's climate change to hit GDP: WB report
LAHORE: The Country Climate and Development Report by the World Bank predicted that Pakistan will start losing any where 'between' 6.5% to 9% of its GDP by 2050 because of climate change. 'Alarmingly, Pakistan is currently losing around 6% of its GDP due to inefficient urban transport,' said Tauqeer Ahmed Rana, an expert in the area of Road Safety, quoting from the above report. He added that efficient urban transport planning will enhance urbanization-driven economic gains and improve impaired mobility. The World Bank report on Pakistan stated that the country will need $368 billion by 2030 for climate mitigation and adaptation if it were to avoid floods, droughts, and heat waves. 'But the harsh reality is that despite committing billions of dollars, whatever meagre funds received so far are mostly in the form of loans rather than grants, further exacerbating the economic and financial woes of the developing and the underdeveloped,' said Tauqeer. Copyright Business Recorder, 2025