26-06-2025
- Business
- Business Recorder
IED rates ADB's 5-year CAP for Pakistan as highly successful
ISLAMABAD: The Independent Evaluation Department (IED) has rated the Asian Development Bank (ADB)'s five years Country Assistance Program (CAP) for Pakistan, amounting $15.1 billion as highly satisfactory and successful.
The evaluation document however, noted that headway on reducing debilitating circular debt in the power sector was limited, and growth in access to affordable housing was below target.
This Country Assistance Programme Review (CAPR) assesses the performance of ADB sovereign and non-sovereign operations that were completed, ongoing, or approved during 2020–2024 in Pakistan.
ADB's IED rates $800m 'TCP' as 'successful'
The ADB's portfolio in Pakistan over the 5-year CAPR period comprised of 113 sovereign lending and Technical Assistance (TA) projects amounting to $15.1 billion, as well as three non-sovereign lending and TA projects worth $111.4 million.
The ADB's CAP in Pakistan, including performance against the 2021–2025 Country Partnership Strategy (CPS) targets, is rated successful overall. This evaluation follows the new 2024 Guidelines for the Country Assistance Programme Review and Validation, assesses all aspects of ADB's engagement in Pakistan rather than the CPS results alone, and centres on four criteria: relevance, efficiency, effectiveness, and sustainability.
The ADB's portfolio facilitated reforms to make Pakistan's energy sector more efficient and sustainable. The CPS set an ambitious target for reducing the annual circular debt flow in the power sector to less than Rs50 billion by 2025 from a very high Rs450 billion in fiscal year 2019. Progress was made. The circular debt had dropped to Rs83 billion by the end of 2024. The Rs50 billion CPS indicator target was not likely to be met by 2025, however, the energy sector continues to be captive to persistent challenges, including the high cost of generating power with imported fossil fuels, transmission and distribution losses, low collection rates, governance issues at electricity supply companies, and delays in tariff adjustments. To improve access to affordable housing, a CPS indicator targeted a mortgage-to GDP-ratio of 0.4 per cent by 2025. As of 2024, despite efforts, the ratio had improved by only 20 percent and stood at 0.3 percent.
The pandemic and the 2022 flood disaster have likely put the original CPS objectives for school enrolment out of reach. Health expenditure as a share of GDP rose temporarily due to the COVID-19; still, at 1.2 percent, the average allocation during the CAPR period was well short of the CPS's 2025 benchmark of 3 percent of GDP. The CAP helped Pakistan make progress on several socioeconomic fronts during 2020–2024, but further effort is required in the most challenging areas if the country's ambitious development targets are to be achieved.
The CAP strongly aligned with Pakistan's critical development needs and the focus of the government's Vision 2025 on addressing economic, governance, and human development challenges. The ADB investments aimed to improve economic management, build resilience, and boost competitiveness and private sector development—the three pillars of the 2021–2025 CPS, which fully aligned with ADB's Strategy 2023 and linked to all seven of its operational priorities. The programme supported federal and provincial government long-term goals.
The ADB maximised its support through a fit-for-purpose mix of financing modalities and instruments. A sound design and ADB's quick and agile adaptations sustained the CAP's relevance through the series of crises that marked the CAPR period, including the COVID-19 pandemic, disastrous flooding in 2022, bouts of severe macroeconomic instability, and three changes in government.
The CAP met most of the key outcome targets in the CPS for 2021–2025; 100 percent of the operations completed during the CAPR period, many of which were approved under previous CPSs, were rated effective or highly effective. Top achievements included improved economic management and governance. Targets for raising tax revenues and expanding exports were achieved. So were those for strengthening the resilience of vulnerable populations to climate change and natural disasters. Social protection was expanded through ADB support, and water resource management and irrigation infrastructure were improved.
The pandemic and the 2022 flood disaster have likely put the original CPS objectives for school enrolment out of reach. Health expenditure as a share of Gross Domestic Product (GDP) rose temporarily due to the COVID-19; still, at 1.2 percent, the average allocation during the CAPR period was well short of the CPS's 2025 benchmark of 3 percent of GDP. The CAP helped Pakistan make progress on several socioeconomic fronts during 2020–2024, but further effort is required in the most challenging areas if the country's ambitious development targets are to be achieved.
The CAP's highly satisfactory rating for efficiency is based on the delivery by sovereign operations of results in an efficient and a timely manner. The portfolio was large, but detailed preparation, sound project designs, and regular stakeholder consultation achieved impressive results on two key indicators over the 2020–2023 period, average time from concept approval to first disbursement (22.4 months), and average disbursement rate (125 percent). The CAP outperformed the ADB average on both these measures. About one of every eight lending projects completed during the CAPR period were rated efficient or highly efficient. Delays in the adoption of related legislative amendments were responsible for the lower efficiency evaluations of most of the remaining projects.
Copyright Business Recorder, 2025
