Jeddah, Kingdom of Saudi Arabia, 13 May 2023 – In an official ceremony in the city of Jeddah, Kingdom of Saudi Arabia, the Government of the Islamic Republic of Pakistan and the Islamic Development Bank (IsDB) have signed a Memorandum of Understanding on the development of the IsDB Group Country Engagement Framework (CEF) for the country that covers the period 2023-2025.
The signing came on 13 May 2023 on the sidelines of the ongoing 2023 IsDB Group Annual Meetings held under the patronage of The Custodian of The Two Holy Mosques, King Salman bin Abdulaziz Al Saud.
H.E. Mr. Sardar Ayaz Sadiq, Federal Minister for Economic Affairs and IsDB Governor for Pakistan, and IsDB President and Group Chairman, H.E. Dr. Muhammad Al Jasser, put their signatures to the MoU which marks a significant milestone in upgrading the ongoing cooperation between IsDB Group, the AAA-rated Multilateral Development Bank (MDB) of the Global South, and the Government of Pakistan.
IsDB Group Regional Hub Turkiye will play a key role in leading the CEF exercise by working closely with the Government of Pakistan to ensure that the country’s national development priorities are fully considered in the CEF.
This new IsDB CEF for Pakistan is based on four main pillars namely i) supporting soft and hardware infrastructure development focusing on human capital development and resilient infrastructure; ii) supporting enhanced productivity of agriculture and food security giving priority to rural infrastructure, i.e., water, roads, and electricity while enhancing agricultural productivity and value addition in the rural non-farm economy; iii) supporting enhanced access to finance for the private sector with a special focus on SMEs; and iv) promoting Pakistan as a source of knowledge and expertise through South-South and Triangular Cooperation (SSTrC).
Under the document, the Islamic Development Bank Group will continue to support Pakistan in its efforts to mobilize resources and partners to benefit from IsDB Group’s financing through various modes of financing and covering priority sectors as mutually agreed through the CEF.
Pakistan has been facing long-standing economic challenges exacerbated by the 2022 devastating floods which affected all four of the country's provinces and a great number of its population.
The country is a founding member of IsDB and has been among the leading beneficiaries of IsDB Group financing having the second-largest portfolio among IsDB Group member countries. As of March 2023, the IsDB Group has approved a total financing of about US$14.8 billion for Pakistan which covers a wide array of sectors of the economy including Energy (70.1%), Industry and Mining (12.9%), and Agriculture (7.3%).