The Government of Pakistan has taken a significant step toward modernizing state-owned enterprises (SOEs) through a $400 million results-based financing program facilitated by the Asian Development Bank (ADB). The initiative, known as the Accelerating State-Owned Enterprise Transformation Program, aims to improve governance, financial sustainability, and service delivery across 40 key state-run entities.
The program, which is currently under consideration by the Concept Clearance Committee, is designed to link loan disbursements directly to measurable performance outcomes. By tying financial support to tangible improvements in corporate governance, operational efficiency, and oversight, the government seeks to ensure that reforms deliver real, lasting impact.
According to official documents, the Ministry of Finance will lead program execution in coordination with line ministries and SOE boards. A major focus will be enhancing the financial sustainability of the National Highway Authority (NHA), along with other high-priority SOEs, to strengthen their operational efficiency and public service capacity.
The reforms are structured to align with the State-Owned Enterprises Act 2023 and the SOE Ownership and Management Policy 2023, aiming to reinforce transparency, accountability, and long-term performance monitoring. Strengthening the Central Monitoring Unit’s capacity to oversee these reforms is a key element, providing a framework for consistent evaluation and reporting.
Technical reviewers of the program have highlighted areas requiring further clarity. These include defining measurable, disbursement-linked indicators to track reform progress and ensuring that consultations with relevant ministries and SOE management teams are fully documented. Such steps are essential to secure long-term ownership and sustainability of the initiatives.
Officials emphasize that the program represents more than financial assistance—it is a strategic effort to embed modern management practices and accountability structures within Pakistan’s public sector. By introducing performance-linked reforms, the government intends to create SOEs that are not only financially viable but also responsive to public service expectations and capable of contributing meaningfully to national economic growth.
The program’s scope covers diverse sectors, including infrastructure, energy, transport, and other critical industries where SOEs play a central role. Modernization efforts are expected to foster efficiency, attract private investment, and set the stage for improved governance standards across Pakistan’s public sector.
With the support of the ADB, this $400 million initiative signals Pakistan’s commitment to institutional reform and aligns with broader regional efforts to strengthen public sector governance, fiscal discipline, and sustainable economic development. Successful implementation could serve as a model for results-based public sector transformation, offering lessons for other developing economies undertaking similar initiatives.
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