According to a statement issued by the ADB on Wednesday, the financing will provide timely budgetary support following eligible disaster events, helping Pakistan reduce the economic and financial impact of natural calamities.
The funding has been approved under the bank's policy-based lending framework as part of the second subprogramme of the Climate and Disaster Resilience Enhancement Programme.
The ADB said Pakistan suffers average annual economic losses of approximately $2 billion due to floods, earthquakes and other natural disasters.
The bank highlighted the devastating impact of the 2022 floods, which caused an estimated $14.9 billion in direct damage and $15.2 billion in economic losses. The disaster also pushed as many as 9.1 million people into poverty.
According to the ADB, vulnerable populations, particularly rural communities, women and girls, face greater challenges in recovering from natural disasters.
The programme aims to strengthen Pakistan's disaster preparedness and risk management systems while integrating climate resilience into national development planning and investment.
It will also support reforms to improve the country's disaster risk financing framework, ensuring that funds are readily available to address emergencies and support recovery efforts following major disasters.
ADB Country Director for Pakistan Emma Fan said vulnerable communities often bear the greatest burden when disasters strike.
She emphasised that investment in disaster preparedness could help protect lives and livelihoods, minimise economic losses and safeguard the country's development progress.
Fan added that the programme would assist Pakistan in implementing important reforms to build a more resilient future.
The ADB said the initiative was aligned with Pakistan's national priorities for disaster risk management and the bank's broader commitment to supporting climate resilience across Asia and the Pacific.
Pakistan has faced persistent challenges in securing financing for long-term flood protection infrastructure. The Fourth National Flood Protection Plan has also faced delays due to funding constraints.
Earlier, in October 2024, the ADB approved another $500 million policy-based loan under its Climate and Disaster Resilience Enhancement Programme to strengthen Pakistan's disaster preparedness and response capacity.
The latest financing marks another step in the bank's support for Pakistan's climate adaptation and disaster management efforts.
