Pakistan, JICA revive lending with fresh development push

April 19, 2026 (MLN): Pakistan and the Japan International Cooperation Agency have agreed to reinvigorate development cooperation, marking a key step toward restoring Japanese financing flows and accelerating priority infrastructure and social sector projects.

The development came during a meeting between Federal Minister for Finance and Revenue Muhammad Aurangzeb and JICA Senior Vice President Shohei Hara on the sidelines of the World Bank–IMF Spring Meetings in Washington, D.C.

A major breakthrough highlighted during the discussions was JICA’s decision to resume its lending portfolio for Pakistan after a prolonged pause.

As part of this revival, a water supply project in Faisalabad has been identified as the first initiative under the renewed Yen-denominated financing program, signaling a restart of long-stalled development funding.

The finance minister noted that progress has also been made under JICA’s grant program, with longstanding procedural and operational bottlenecks largely resolved through coordination between both sides.

However, he raised concerns over Pakistan’s negative net disbursement position with JICA, emphasizing the urgency of reversing this trend through sustained and active lending.

Both sides explored avenues to deepen cooperation, particularly by leveraging Japan’s expertise in social sectors such as healthcare and education.

The possibility of blended financing—combining JICA funding with other international and domestic resources—was also discussed as a way to enhance development impact and align with Pakistan’s broader economic reform and growth agenda.

In addition to strategic financing, the minister assured full government support in addressing operational challenges linked to JICA-backed initiatives.

These include resolving manpower shortages at the Pakistan Institute of Medical Sciences (PIMS) and ensuring the functionality of security scanning equipment at Karachi Port, where one unit remains inactive due to maintenance and spare parts issues.

The meeting also reaffirmed mutual commitment to continued collaboration, with Pakistan expressing appreciation for Japan’s support in the country’s ongoing peace and development efforts.

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