The European Investment Bank (EIB) announced on Wednesday a commitment of €160 million to support Pakistan in rebuilding homes in the southern Sindh province and enhancing water quality in the commercial hub of Karachi. The move is aimed at bolstering the country's long-term resilience.
Details of the Commitment
The announcement was made by EIB Global, the bank's lending arm, during a European Union–Pakistan business forum held in Islamabad. The EIB is recognized as one of the largest multilateral financial institutions globally and a major provider of climate finance.
According to an EIB report, the bank is providing a €100 million loan to the Pakistani government for the Sindh housing initiative. This initiative is described as the world's largest ongoing reconstruction program, targeting the rebuilding of approximately 2.1 million rural homes damaged by devastating floods in 2022. The total cost of the project is nearly $2 billion, covering 40 percent of rural households in Sindh.
Additionally, the EIB is lending €60 million to the Pakistani government for the Karachi Water and Sewerage Corporation (KWSC). The funds will be used to construct two energy-efficient filtration plants in the Gharo and Pipri towns, located east of Karachi.
Impact on Communities
Ahad Khan Cheema, Pakistan's minister for economic affairs, stated: “The European Investment Bank’s renewed engagement in Pakistan is a significant step toward strengthening Pakistan’s recovery and long-term resilience. This financing will play a vital role in rebuilding flood-affected communities in Sindh and improving access to safe drinking water in Karachi.”
The EIB noted that the filtration plants in Karachi will supply approximately 300 million liters of clean drinking water per day, sufficient to meet the needs of 2.2 million residents.
EIB Vice President Nicola Beer emphasized that the loans will support inclusive, sustainable development for the most vulnerable people in Pakistan. “This also marks an important step as the EIB resumes financing in Pakistan after a decade, reaffirming our commitment to support climate resilience and inclusive recovery,” she said.
Support from Other Institutions
The housing construction program in Sindh is also being supported by the World Bank, the Asian Development Bank, the Islamic Development Bank, and the provincial government. Reconstruction will follow a plan that ensures households play a central role in rebuilding their homes according to resilience standards that address risks from combined or consecutive disasters.
Pakistan's southern Sindh province was severely impacted by deadly floods in 2022, which killed over 1,700 people nationwide, destroyed critical infrastructure, and caused damages exceeding $30 billion, according to government estimates.
