Qudsia Bano

Foreign-funded development projects recorded an expenditure of Rs 12.8 billion during July-November FY 2025-26 out of Rs 25.1 billion sanctioned for the period, according to the Monthly Development Update – December 2025 released by the Ministry of Planning, Development and Special Initiatives. The report states that the Public Sector Development Programme (PSDP) for FY 2025-26 includes 86 foreign-funded projects with a total foreign cost component of Rs 4.2 trillion.

Of these, 15 projects are fully funded through foreign assistance, while the remaining 71 projects are financed through a combination of foreign aid and local counterpart funding. The Ministry notes that foreign-funded projects constitute a substantial portion of the national development portfolio, owing to their contributions to infrastructure, social sectors, energy, agriculture, technology, and institutional development.

According to the document, the government allocated a rupee cover of Rs 229 billion in the current PSDP to support foreign-funded schemes. The Ministry states that releases for these projects are made through a “one-line release” mechanism, under which sponsoring ministries and divisions receive authorisation in line with quarterly ceilings approved by the Finance Division.

This release strategy is designed to ensure flexibility, timely availability of funds and improved financial management for projects receiving external assistance. The report further states that Principal Accounting Officers (PAOs) are empowered to sanction and release funds for both the foreign aid and local components based on the specific requirements of each project.

The Ministry highlights that this decentralised decision-making mechanism enables implementing agencies to address project needs more efficiently and ensure smoother execution of activities. As per the System of Accounting and Budgeting (SAP) records cited in the update, ministries and divisions sanctioned Rs 25.1 billion for foreign-funded projects during July-November FY26. Of this amount, Rs 12.8 billion was recorded as expenditure.

The Ministry notes that the utilisation level reflects ongoing implementation progress across various sectors supported by foreign assistance. The update emphasises that foreign-funded projects cover a wide range of areas, including energy transmission, water management, infrastructure development, governance reforms, education, health, technology, and agriculture. These projects are financed through multilateral and bilateral partners and play a significant role in supplementing national development efforts.

The Ministry states that foreign-funded development initiatives remain essential for strengthening sectoral capacity, improving service delivery and supporting long-term national development goals. The report notes that continued progress on these projects will advance key development priorities during FY 2025-26.

Credit: INP-WealthPk