By Abdul Ghani

Pakistan is implementing 98 foreign-aided projects under the Federal Public Sector Development Programme (PSDP) 2026-27, with major development partners financing projects across different sectors of the economy.

According to the Ministry of Planning, Development and Special Initiatives' Monthly Development Update – August 2026, available with Wealth Pakistan, the 98 projects have a total foreign assistance component of Rs4.649 trillion, while Rs255 billion has been earmarked in the Rs1 trillion federal PSDP as rupee cover for foreign assistance.

The portfolio involves financing from a diverse group of bilateral and multilateral development partners, including the Asian Development Bank (ADB), International Development Association (IDA), Islamic Development Bank (IDB), China, World Bank, Asian Infrastructure Investment Bank (AIIB), Korea and France, along with projects supported by multiple donors.

According to the development partner-wise allocations presented in the report, projects supported by multiple donors account for the largest allocation of Rs80.3 billion, followed by ADB with Rs65.9 billion and IDA with Rs60.1 billion.

The IDB accounts for Rs40.3 billion, while China's allocation stands at Rs31.7 billion. World Bank-supported projects account for Rs12.7 billion, followed by AIIB at Rs12.2 billion, International Bank for Reconstruction and Development (IBRD) at Rs12.1 billion, Korea at Rs10.8 billion and France at Rs9.4 billion.

The figures indicate that multilateral development institutions continue to account for a substantial portion of foreign-supported development activity, while bilateral partners also remain involved in financing Pakistan's development programme.

Foreign assistance is incorporated into the federal development programme through rupee cover provided in the PSDP, enabling expenditure against both domestic and externally financed components of the projects.

The Planning Ministry authorises funds for these projects in accordance with the government's development budget release strategy. Under the FY2026-27 framework, quarterly releases are set at 15% in the first quarter, 20% in the second, 25% in the third and 40% in the final quarter.

The foreign-funded portfolio forms part of the government's broader effort to channel development resources towards high-impact projects while operating within fiscal constraints. Ministries and divisions have been directed to prioritise fast-moving and nationally significant ongoing projects and ensure efficient and prudent use of development funds.

The document says development policy during FY2026-27 will continue to focus on effective implementation of the Annual Plan, prudent resource management and accelerated PSDP execution, alongside macroeconomic stability, private sector-led growth, exports, digital transformation and climate resilience.

Credit: INP-WealthPk