The European Union has approved a €160 million loan for Pakistan to support flood recovery in Sindh and improve water infrastructure in Karachi.
The financing will be provided through the European Investment Bank and marks its biggest investment in Pakistan in almost ten years.
Out of the total amount, €100 million will be used to support people affected by the devastating 2022 floods in Sindh province. The funding will help rebuild around 2.1 million houses for flood victims, especially in rural areas of Sindh.
These homes will be designed to better withstand natural disasters, helping vulnerable communities recover with safer and more resilient housing.
Women to receive housing funds directly
A key feature of the housing plan is that construction funds will be transferred to women’s accounts. The move is aimed at empowering women while ensuring direct financial support reaches affected families.
Authorities expect the initiative to help flood-hit households rebuild their lives with greater security and dignity.
The remaining €60 million will be spent on improving water supply in Karachi. The money will be used to upgrade water infrastructure and provide better water facilities to residents of Pakistan’s largest city.
The investment is expected to support long-needed improvements in Karachi’s water system.
EIB’s biggest Pakistan investment in nearly a decade
The European Investment Bank’s €160 million financing is its largest investment in Pakistan after almost 10 years. The loan will be provided on soft terms, meaning Pakistan will repay it under easier conditions compared to regular commercial borrowing.
The funding reflects continued international support for Pakistan’s flood recovery and urban infrastructure needs.
The EU-backed financing is expected to benefit both rural flood victims and urban residents. In Sindh, families affected by the 2022 floods will receive support to build new, safer homes.
In Karachi, citizens are expected to benefit from improved water supply and upgraded infrastructure.
