The World Bank has approved a $700 million loan for Pakistan under a new reform-focused program aimed at strengthening economic stability and improving public service delivery.

Under the approved financing, $600 million will be allocated to the federal government, while $100 million will be provided to Sindh province. The World Bank clarified that the funds will be released in phases.

Disbursements will be strictly results-based, meaning funds will only be released once the agreed targets and desired outcomes are achieved.

Tax reforms, expenditure management

According to the World Bank, the program is designed to improve Pakistan’s tax system and public expenditure management. These reforms are expected to enhance fiscal discipline while ensuring better utilization of public resources at both federal and provincial levels.

A key component of the program is the introduction of digital systems to improve public service delivery. The World Bank stated that digitization will help make services more transparent, efficient, and accessible for citizens across Pakistan.

Larger $1.35bn support in stages

The World Bank revealed that a total of $1.35 billion will be provided in different stages under this broader program. This phased approach ensures sustained reform momentum while linking financial support to measurable progress.

The program is fully compatible with the IMF framework and Pakistan’s National Fiscal Pact, ensuring policy consistency and macroeconomic coordination. This alignment is expected to strengthen investor confidence and support long-term economic stability.

Increased resources for social sectors

The World Bank expects the reforms to increase funding for education, health, and social protection sectors. Improved resource allocation is likely to support inclusive development and better outcomes for vulnerable communities.

The World Bank Board has formally approved the Pakistan Public Resources for Inclusive Development Program.

Officials said the initiative will help advance key reforms in both the federation and Sindh province, strengthening governance and service delivery nationwide.