Pakistan and the European Union have signed a €160 million loan agreement to rebuild homes for flood victims in Sindh and improve water infrastructure in Karachi.
The agreement was signed on the sidelines of the Pakistan-EU Business Forum by officials of the European Investment Bank and Pakistan’s Ministry of Economic Affairs.
Under the agreement, the European Union will provide €160 million to Pakistan through the European Investment Bank. The financing will be given on soft terms, meaning Pakistan will repay the loan under easier conditions.
Officials said this is the European Investment Bank’s biggest investment in Pakistan after almost 10 years.
Out of the total amount, €100 million will be used for people affected by the 2022 floods in Sindh. Around 2.1 million houses will be built in the province for flood-hit families.
The homes will be designed to be safe from natural disasters, helping vulnerable communities rebuild with greater protection and security.
Rural flood victims to get safe homes
Flood victims, especially those living in rural areas of Sindh, will benefit from the housing project. The initiative aims to provide new and safer homes to families who lost or damaged their houses during the 2022 floods.
The project is expected to support long-term rehabilitation in some of the worst-affected communities.
Also Read: EU announces €160m loan package for Pakistan
To empower women, the money for house construction will be transferred to women’s accounts. This step is aimed at giving women a direct role in the rebuilding process and improving financial inclusion among flood-affected households.
The arrangement is also expected to help ensure that support reaches families more directly.
€60m for Karachi water supply
The remaining €60 million will be spent on improving water supply in Karachi. The funds will be used to upgrade water infrastructure and improve water facilities for citizens.
The investment is expected to support better access to water in Pakistan’s largest city.
The loan agreement marks a major development in Pakistan-EU cooperation. It will help address two urgent needs: safe housing for flood victims in Sindh and improved water infrastructure in Karachi.
With the European Investment Bank’s largest Pakistan investment in nearly a decade, the project is expected to support both climate resilience and urban service delivery.
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