The Asian Infrastructure Investment Bank (AIIB) has committed a substantial $500 million loan for the reconstruction and expansion of Pakistan’s National Highway N-5 under its Resilient Recovery, Rehabilitation, and Reconstruction Framework. This investment marks the AIIB’s first independent project in Pakistan’s transport sector and focuses on enhancing the infrastructure’s climate resilience, road safety, and operational efficiency.
This project’s scope includes the upgrading of key sections of N-5 into a climate-resilient six-lane dual carriageway, which will improve the highway’s capacity and safety. The initiative is expected to be evaluated and approved by the AIIB by May 2025. The first phase of the project will require $247.75 million, with the Pakistani government contributing $37.63 million. The Multi-Phase Programme (MPP), which includes further phases of the project, is projected to cost $587.98 million, with the AIIB providing a loan of $500 million and the federal government contributing an additional $87.98 million.
The N-5 is Pakistan’s longest national highway, running from Karachi in Sindh to Torkham at the Khyber Pass, passing through key cities like Lahore, Multan, and Rawalpindi. The reconstruction project will span 213 kilometers of the highway across Islamabad Capital Territory, Sindh, Punjab, and Khyber Pakhtunkhwa. The project also includes the reconstruction of two critical bridges in Sindh, with a focus on enhancing the highway’s resilience to climate change and improving its overall safety standards.
The N-5 project is in line with the National Highway Authority’s (NHA) long-term plan to rebuild and expand the country’s infrastructure over a 20-year period. The first phase of the N-5 reconstruction will focus on two major sections: Rawalpindi to Burhan (44 km) and Nowshera to Peshawar (31 km), along with the reconstruction of the Nai Baran Bridge southwest of Hyderabad. The second tier of the first phase will address two additional sections, covering 138 km: Lahore to Gujranwala (68 km) and Ranipur to Rohri (70 km), alongside the reconstruction of the Indus River Bridge at Hyderabad.
To support project preparation, the AIIB has mobilized a $2 million special fund grant, strengthening the project’s groundwork. The reconstruction of N-5 is crucial for improving connectivity between major cities and regions in Pakistan, boosting trade, and enhancing economic growth prospects. With the loan approval from AIIB, the project is set to contribute significantly to the country’s long-term infrastructure development goals, ensuring a modernized road network to meet the growing demands of transportation and climate resilience.