Pakistan Requests Additional ADB Funding for $10 bn ML‑1 Railway Project
Pakistan has asked the Asian Development Bank for extra financing and guarantees to expand the $10 bn Karachi‑Peshawar ML‑1 railway upgrade, building on the $2 bn already secured.
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Desk Analysis
How This Affects the Exchange
Sector Effect
Positive · Buy bias
Infrastructure funding boost lifts Cement, Steel and Banks – Buy bias on related tickers.
Sectors & Direction
Desk read
Desk call: Buy bias · Positively affected
- BanksPositively affected
- CementPositively affected
- SteelPositively affected
- TransportPositively affected
- EconomyPositively affected
Companies
Mentions in This Briefing
Sectors: Banks, Cement, Steel, Transport, Economy — Positive · Buy bias. PSX tickers: MEBL, MCB, UBL, HBL, BAHL, FABL. Infrastructure funding boost lifts Cement, Steel and Banks – Buy bias on related tickers.
Full Story
Open on ProPakistani## Background
Pakistan is seeking further financing from the Asian Development Bank (ADB) to accelerate its flagship infrastructure programme, the $10 billion Karachi‑Peshawar Main Line‑1 (ML‑1) railway project. The request comes as the ADB’s new five‑year Country Partnership Strategy for 2026‑2030 is being rolled out.
## ADB Delegation in Islamabad
An ADB delegation led by Vice‑President for South, Central and West Asia Yingming Yang arrived in Islamabad to discuss Pakistan’s development priorities under the approved partnership strategy. The team met separately with Economic Affairs Minister Ahad Khan Cheema and Finance Minister Muhammad Aurangzeb on Wednesday.
## Existing Funding and New Requests
Pakistan has already secured US$2 billion from the ADB for the Karachi‑to‑Rohri segment of the 1,670‑km ML‑1 line, which is currently under construction. The Economic Affairs Division is now negotiating additional financing options, including policy‑based guarantees and private‑sector partnership structures, to cover the remaining phases of the project.
## Emphasis on Private‑Sector Participation
Minister Cheema urged the ADB to broaden its private‑sector operations in Pakistan and highlighted the ML‑1 line as a national flagship that can attract commercial investors. The government also briefed the ADB on ongoing fiscal, structural and governance reforms, and reiterated its commitment to privatization and the development of a pipeline of commercially viable projects.
## ADB’s Response
Yang welcomed recent improvements in Pakistan’s sovereign credit ratings and macro‑economic stability. He noted the country’s progress in project readiness and suggested innovative financing tools such as policy‑based guarantees and guarantees for Panda bond issuance. The ADB reaffirmed its support for the ML‑1 project, proposing a working group on institutional reforms within Pakistan Railways to commence shortly.
## Outlook
Both the ADB delegation and Pakistani officials expressed optimism that enhanced financing and institutional reforms will accelerate the ML‑1 project, which is expected to boost trade, logistics efficiency, and regional connectivity.
## Market Implications
The anticipated infusion of additional funds and the push for private‑sector involvement are likely to benefit construction‑related sectors, including cement, steel, and engineering firms, as well as banks that may underwrite project financing.