The Economic Affairs Division (EAD) and the Asian Infrastructure Investment Bank (AIIB) have formalized a loan agreement amounting to $320.16 million for Phase-IA of the "Reconstruction of National Highway N-5 under Pakistan’s Resilient Recovery, Rehabilitation and Reconstruction Framework Project." This project targets critical sections of the National Highway (N-5) that traverse Sindh, Punjab, and Khyber Pakhtunkhwa, serving as the backbone of Pakistan's transport network.
The agreement was signed by Secretary of the Economic Affairs Division Muhammad Humair Karim Kidwai and Chief Investment Officer of Public Sector & Project and Corporate Finance (Global) Clients at AIIB, Konstantin Limitovskiy. The ceremony was attended by Federal Economic Affairs Minister Ahad Khan Cheema. Additionally, a separate project agreement was signed between AIIB and the National Highway Authority (NHA), with the presence of the Additional Secretary of the Ministry of Communications and the CEO of the National Highway Authority.
Ministerial Remarks on Partnership
Federal Economic Affairs Minister Ahad Cheema commended the longstanding partnership with AIIB, noting that the bank has consistently proven to be a reliable development partner for Pakistan. He emphasized that the N-5 project would not only bolster the country's resilient infrastructure but also play a significant role in enhancing regional connectivity, trade activities, and economic growth.
Strategic Importance of N-5
The Secretary of EAD appreciated the enduring collaboration with AIIB, stating that the bank has been a strong and reliable partner. He highlighted that the N-5 Road Project will further deepen this partnership, strengthen mutual trust and cooperation, and advance Pakistan's sustainable infrastructure network. The N-5 corridor is of immense importance as it connects key regions of Pakistan, boosting regional connectivity, strengthening sustainable infrastructure, and supporting economic growth across the country.
The Chief Investment Officer of AIIB emphasized the strong development collaboration with the Government of Pakistan and underscored the strategic importance of the N-5 project as part of an international transport corridor. He added that the reconstruction of N-5 will be carried out using modern, green, and climate-resilient design standards with state-of-the-art infrastructure, ensuring efficiency, sustainability, and long-term durability.
Milestone in Pakistan-AIIB Cooperation
The signing of this agreement marks another important milestone in Pakistan-AIIB cooperation, reflecting the shared commitment to building resilient infrastructure, enhancing regional connectivity, and promoting sustainable economic development.
Meeting with AIIB President
Meanwhile, Federal Economic Affairs Minister Ahad Cheema held a meeting with AIIB President Zou Jiayi to discuss mutual cooperation and future development initiatives. The minister congratulated Ms. Jiayi on her assumption of office and expressed confidence that Pakistan's partnership with AIIB would be further consolidated under her leadership. The AIIB president reaffirmed that Pakistan remains a strategic development partner of the bank, with an overall portfolio amounting to approximately $3.5 billion. She inquired about Pakistan's strategic priorities for the next three to five years to ensure that AIIB's future engagement aligns closely with the country's development priorities.
The president further conveyed the bank's interest in expanding its operations in Pakistan beyond sovereign financing by exploring opportunities for non-sovereign interventions, thereby strengthening collaboration with the private sector and broadening the scope of development cooperation.
Focus on Infrastructure Projects
The minister acknowledged AIIB's ongoing portfolio of $1.387 billion in Pakistan and expressed appreciation for the bank's continued support. He underscored the government's strategic focus on federal-level infrastructure projects, particularly in the railway, road, and power sectors, emphasizing the need for focused, high-impact initiatives capable of delivering substantial economic dividends. He highlighted the vast potential of Pakistan's railway system, noting that modernization of freight movement and logistics would significantly enhance efficiency and strengthen overall economic productivity. He emphasized the importance of aligning AIIB's engagement with Pakistan's infrastructure priorities, citing transformative projects such as the Main Line-1 Railway Project (ML-1), N-5 National Highway Phase-II, and the modernization of electricity transmission and distribution systems. He also recognized AIIB's contributions to key projects in energy, transport, and urban development.
Pragmatic Approach and Future Collaboration
The federal minister emphasized the government's priority for adopting a pragmatic approach over the next three to five years, focusing on select solid and outcome-oriented projects. He underscored the importance of aligning the external economic assistance funded portfolio with federal government priorities to ensure maximum developmental impact. The minister further highlighted the need for establishing an AIIB office in Pakistan to facilitate closer coordination and more effective engagement. He also encouraged enhanced collaboration with the private sector, particularly in agriculture, to unlock growth potential and strengthen value chains, thereby contributing to sustainable economic development.
Concluding the meeting, the federal minister reiterated Pakistan's request for AIIB's expeditious cooperation and enhanced support for priority infrastructure initiatives, affirming the government's commitment to fostering sustainable economic growth through strategic development partnerships.
