IMF to Give Pakistan $410 Million Climate Funds Next Fiscal Year

Pakistan ranks among the 15 most climate-vulnerable countries globally and is experiencing a sharp rise in the frequency, intensity, and scope of natural disasters, the International Monetary Fund (IMF) said in its latest climate report. The IMF confirmed that Pakistan is set to receive $410 million under climate financing during the next fiscal year as part of the recently agreed $1.4 billion climate financing initiative. This funding comes under the Resilience and Sustainability Facility (RSF), linked to Pakistan’s Extended Fund Facility (EFF) program. The IMF noted that Pakistan’s environmental risks have resulted in immense financial and developmental losses. The catastrophic floods of 2022 alone affected over 33 million people and caused economic damage exceeding $30 billion. To mitigate future risks, the IMF outlined several national goals and policy recommendations. These include promoting the use of electric vehicles, increasing the share of renewable energy, launching a ten-year tree plantation project, and limiting the development of coal-fired power plants. Pakistan has committed to reducing its greenhouse gas emissions by 15 percent by 2030. To support this transition, the IMF urged the country to adopt green budget tagging, implement disaster risk budgeting, and strengthen its institutional and legal frameworks under the National Climate Change Policy. While Pakistan has made progress in climate strategy, the IMF warns that the country’s capacity to address environmental shocks remains very weak. These shocks impose severe financial burdens and hinder the progress of public development projects. A special legislative authority and dedicated climate fund have been established to facilitate access to financial resources. However, the IMF stressed that additional financial capacity is still needed to implement the national climate strategy effectively. The report concludes that climate change is creating not just financial strain, but also major developmental risks for Pakistan.