By Qudsia Bano

Project-based foreign assistance to Pakistan reached over $2.13 billion during the first eight months of the current fiscal year (FY26), with a strong focus on infrastructure, energy and development initiatives, according to official data.

The Ministry of Economic Affairs’ latest report shows that total project financing stood at $2,133.14 million during July–February FY26, reflecting continued disbursements for ongoing development projects across multiple sectors.

The data indicates that project-related inflows were directed towards a wide range of initiatives, including power generation and transmission, water resource development, transport infrastructure, urban development and social sector programmes. These projects are being implemented by various federal and provincial entities with support from international development partners.

A significant portion of project financing was concentrated in the energy sector, particularly in hydropower and transmission projects. Major ongoing initiatives include the Dasu Hydropower Project, Tarbela extensions, Mohmand Dam and several power transmission enhancement programmes being implemented by WAPDA and the National Transmission and Dispatch Company (NTDC).

In addition to energy, substantial disbursements were made for water and irrigation projects, including canal development and water resource management schemes in different provinces. These projects aim to improve water availability, agricultural productivity and climate resilience.

Transport and urban infrastructure projects also received considerable funding during the period. These include road development projects, regional connectivity initiatives and urban transport systems such as bus rapid transit (BRT) projects and city improvement programmes.

The report further shows that development financing extended to social sector initiatives, including education, health, social protection and housing-related projects. Several programmes supported early learning, healthcare systems and post-flood reconstruction efforts, particularly in Sindh and other affected regions.

Project financing was provided through a mix of loans and grants, with loans accounting for the larger share of disbursements. These funds were disbursed in various forms, including direct payments, reimbursements and third-party financing arrangements, depending on project requirements.

The data also indicates that project-based assistance was sourced from multiple development partners, including multilateral institutions and bilateral contributors.

Overall, the disbursement of over $2.13 billion in project financing during the first eight months of FY26 highlights continued progress in the implementation of infrastructure and development initiatives across key sectors.

Credit: INP-WealthPk