Pakistan Seeks Full $1.7 Billion World Bank Loan Despite Reform Concerns
ISLAMABAD, November 10, 2026: Pakistan plans to continue pursuing a $1.7 billion World Bank financing programme despite slow implementation and concerns over compliance with important economic reform commitments.
The programme, called Public Resources for Inclusive Development (PRID), aims to expand tax collection, improve government spending and strengthen financial management.
According to The Express Tribune, government officials have indicated that Pakistan does not intend to abandon the financing arrangement.
Why Are Pakistan’s World Bank Loan Conditions Under Scrutiny?
The government faces questions concerning its National Tariff Policy and National Fiscal Pact commitments.
According to ProPakistani, Pakistan increased import duties in June 2026 and approved additional customs duties in October to protect a domestic tyre manufacturer.
These decisions have been reported as inconsistent with the trade-liberalisation commitments associated with the financing programme.
Another concern involves the federal government’s approval of Rs. 87 billion for a project in Sindh.
The National Fiscal Pact seeks to reduce federal spending on responsibilities constitutionally assigned to provincial governments.
How Much World Bank Financing Has Pakistan Received?
The $1.7 billion programme is structured through four overlapping phases.
| Financing Component | Amount |
|---|---|
| Total programme | $1.7 billion |
| Initial approved phase | $700 million |
| Federal government component | $600 million |
| Sindh component | $100 million |
| Federal advance disbursed | $164.5 million |
| Proposed KP operation | $200 million |
The federal operation became effective on May 14, 2026, with an advance disbursement of $164.5 million recorded on June 29.
The World Bank has rated implementation of the federal component as Moderately Satisfactory.
What Reforms Does the World Bank Want?
The financing programme focuses on three main objectives.
Tax reforms: Improving agricultural income taxation, property tax collection and provincial revenue systems.
Government spending: Reducing inefficient expenditure and improving the division of financial responsibilities between federal and provincial governments.
Financial management: Strengthening government statistics, digital records, budget monitoring and public procurement systems.
The programme also supports reforms concerning electricity subsidies and public service delivery.
Will the Loan Affect Taxes and Electricity Bills?
The proposed reforms could influence how Pakistan collects taxes and distributes government subsidies.
Property owners, agricultural businesses and electricity consumers may be affected by future policy changes.
However, the financing programme does not independently establish an immediate increase in household electricity tariffs or income tax rates.
Any changes would require relevant government decisions and implementation measures.
What Happens Next?
Pakistan intends to proceed with additional financing phases, including a proposed $200 million operation for Khyber Pakhtunkhwa.
Future progress will depend on project approvals, implementation milestones and compliance with applicable financing requirements.
The full $1.7 billion has not yet been disbursed.