In a significant move to support Pakistan’s efforts to mitigate the effects of climate change, an International Monetary Fund (IMF) mission is set to arrive in Islamabad next week for talks regarding around $1 billion in climate financing. This funding is aimed at strengthening Pakistan’s climate resilience and supporting the country’s transition to cleaner energy. Khurram Schehzad, an adviser to Pakistan’s finance minister, confirmed the news on Thursday, stating that the IMF mission will be in Pakistan from February 24 to 28 to engage in a “review and discussion” of the funding under the IMF’s Resilience and Sustainability Trust.
The Resilience and Sustainability Trust, established by the IMF in 2022, is designed to provide long-term concessional finance for countries to address climate change. The fund specifically targets climate-related spending, including initiatives focused on adapting to the challenges posed by climate change and transitioning to cleaner, more sustainable energy sources. This financing is crucial for Pakistan, a country that faces significant vulnerabilities due to its exposure to extreme weather events and environmental disasters.
Pakistan formally requested around $1 billion in climate resilience funding from the IMF in October 2024, acknowledging the urgent need for financial support to address the devastating effects of climate change. The country’s economy, which has been under immense strain in recent years, particularly due to extreme weather events, is now seeking assistance to build resilience against future climate-related challenges. The IMF’s support is expected to be a vital component in Pakistan’s broader efforts to stabilize its economy and ensure long-term sustainability.
The climate financing talks are part of Pakistan’s broader engagement with the IMF, which has been essential in stabilizing the country’s economy. Late last year, Pakistan secured a $7 billion Extended Fund Facility (EFF) with the IMF, aimed at restoring economic stability and addressing urgent fiscal challenges. This new climate funding, under the IMF’s Resilience and Sustainability Trust, is expected to complement the EFF, which is designed to support Pakistan’s recovery and development.
The Global Climate Risk Index, which ranks countries based on their vulnerability to climate change, places Pakistan among the most at-risk nations. The devastating floods of 2022, which affected over 33 million people and led to the loss of more than 1,700 lives, highlighted the country’s acute exposure to climate-related disasters. Scientists have pointed to global warming as a key factor exacerbating the intensity of these floods. Pakistan’s economic difficulties, coupled with its high debt burden, have made it challenging for the government to effectively respond to such disasters and to fund climate resilience initiatives independently.
As part of its ongoing engagement with the IMF, Pakistan will also welcome another IMF mission in the first week of March. This mission will be tasked with conducting the first review of the $7 billion Extended Fund Facility. These ongoing discussions underscore Pakistan’s determination to navigate its economic challenges while addressing the pressing issues related to climate change.
The outcome of next week’s climate finance talks will be pivotal for Pakistan’s long-term recovery, enabling the country to invest in climate-resilient infrastructure, sustainable energy solutions, and disaster preparedness. As climate change continues to pose a significant threat to global economies, this partnership with the IMF highlights the critical role of international financial institutions in supporting vulnerable nations in building resilience and fostering sustainability.