IMF and Pakistan Reach Staff Agreement on $1 Billion Loan and $1.3 Billion Climate Facility.

The International Monetary Fund (IMF) and Pakistani authorities have achieved an agreement at the staff level about the first review of Pakistan’s Extended Fund Facility (EFF) and a new arrangement under the Resilience and Sustainability Facility (RSF). The accord, announced during meetings in Karachi and Islamabad from February 24 to March 14, 2025, is subject to IMF Executive Board approval.

Under the deal, Pakistan will receive around $1 billion (SDR 760 million) from the EFF, increasing the overall program payouts to $2 billion. Furthermore, the new 28-month RSF agreement would provide Pakistan access to $1.3 billion (SDR 1 billion) to help its climate resilience and sustainability activities.

In addition to maintaining a tight enough monetary policy to keep inflation low, the IMF noted that “the authorities remain committed to advancing a gradual fiscal consolidation to sustainably reduce public debt, accelerating cost-reducing energy sector reforms to enhance its viability, and implementing Pakistan’s reform agenda to accelerate growth, while strengthening social protection and health and education spending.” The EFF-supported program is still being implemented strongly.

The RSF will also help Pakistan’s efforts to improve climate adaptation through budget and investment planning, increase the country’s ability to withstand natural disasters, improve the efficient and productive use of water, strengthen the climate information architecture to better disclose climate risks, and align energy sector reforms with mitigation goals, the statement continued.