Pakistan Concurs with IMF’s Climate and Development Demands

Pakistan has agreed to the International Monetary Fund’s (IMF) requirements to update its project selection process and increase the weighting criteria for climate change considerations by August of the coming year, alongside a carbon fee slated for announcement in the upcoming budget, The News reported. Pakistan has conceded to the IMF’s demand that all new infrastructure projects exceeding a cost of Rs7.5 billion must have their Planning Commission (PC-1) documentation made publicly available on the PC website. Top official sources indicated that the government will enhance its project appraisals and climate screening assessments to prioritise infrastructure with the greatest impact. The official stated that Pakistan and the global lender have decided to broaden the federal government’s budget tagging system to encompass grant and subsidy expenditures. This same methodology will also be applied to tag provincial government spending, the official added. Furthermore, Pakistan committed to the IMF to actively work towards tagging and tracking expenditures that are detrimental to the climate and to align its budget tagging practices with other green taxonomies. The government will revise the project selection criteria for the Public Sector Development Programme (PSDP) to give precedence to climate-friendly initiatives. Climate change considerations will constitute at least 30% of the selection criteria for infrastructure projects. A transparent scoring system, complete with explicit protocols for project evaluation, will be developed. The government will release the distribution of scores for new projects by August 2026. Moreover, Pakistan will provide an annual report on the selection process and publish the scores for each project approved by the Central Development Working Party (CDWP) and the Executive Committee of the National Economic Council (ECNEC). Pakistan will also implement adaptation and mitigation assessments by the end of August 2027. Climate vulnerability, adaptation, and mitigation assessments will be a mandatory prerequisite for the inclusion of all new major infrastructure projects in the PSDP.