ISLAMABAD: The European Investment Bank (EIB) has announced its return to Pakistan after a decade, unveiling €160 million in financing for housing reconstruction and water sector projects.
Out of the total package, €100 million will support climate-resilient reconstruction of approximately 2.1 million homes in Sindh following the devastating 2022 floods, while €60 million will be allocated to improve water quality in Karachi.
These initiatives form part of the European Union’s Global Gateway strategy, its flagship external investment program aimed at promoting sustainable development. The projects are designed to enhance resilience to floods and heatwaves, with a particular focus on vulnerable populations and gender inclusion.
The EIB announced the €160 million loan, backed by EU guarantees, during a gala dinner held as part of the High-Level EU-Pakistan Business Forum on Tuesday night. A formal signing ceremony for the agreement is expected to take place at a later stage.
The bank is supporting what is considered the largest reconstruction programme in the world in Sindh province, aimed at rebuilding around 2.1 million homes in rural areas damaged by the 2022 floods. With an estimated total investment of nearly $2 billion, the programme is expected to benefit about 40 percent of rural households in Sindh. It is being implemented with the support of the Government of Sindh, World Bank, Asian Development Bank and Islamic Development Bank.
In addition, the EIB will support the Karachi Water and Sewerage Corporation in improving water quality by financing the construction of two filtration plants in Gharo and Pipri. These energy-efficient facilities are expected to supply approximately one billion litres of clean drinking water per day to the city, significantly enhancing water availability for residents.
These joint efforts by the Government of Pakistan and the European Investment Bank fall under the EU’s Global Gateway initiative, which aims to mobilize up to €400 billion in investments worldwide between 2021 and 2027 to promote economic growth, create jobs and strengthen infrastructure.
EIB Vice-President Nicola Beer said, “Rebuilding homes and strengthening essential services like water help create stronger, safer, and more resilient communities. Through our support for Sindh’s housing reconstruction programme and water filtration projects in Karachi, we are helping Pakistan enhance climate resilience, improve access to safe drinking water, and support inclusive, sustainable development—particularly for vulnerable communities. This also marks an important step as the EIB resumes financing in Pakistan after a decade, reaffirming our commitment under the EU’s Global Gateway initiative.”
