Supporting the energy transition
Strengthening the water and sanitation sector
Helping guide urban development
Pakistan is the sixth most populated country of the world and lies at the crossroads of several highly strategic Asian regions. Bordered by the Arabian Sea and surrounded by the two giants of the continent (India and China) as well as by Afghanistan and Iran, Pakistan plays a crucial role in the region’s geopolitical balance. Since it obtained its independence in 1947, Pakistan’s foreign policy has been very influenced by its rivalry with India, which has given rise to three wars between the countries. Even though relations have calmed down since the 2000s, the question of Kashmir still remains very sensitive.
Pakistan’s demography is dynamic, and the emergence of a consumer middle class has generated growth in the population’s needs. Pakistan is currently facing a serious energy crisis, and the frequent electricity outages have a considerable negative impact on the Pakistani economy (estimated at a loss of 2 or 3 percentage points in GDP growth rate) and on the living conditions of the country’s inhabitants.
AFD has been active in Pakistan since 2006 with a “green and inclusive growth mandate”. It’s especially involved in financing energy efficiency and the production of hydroelectricity. Its actions thus target renewable energies in order to further climate change mitigation and adaptation. To fulfill its goals, AFD provides sovereign and non-sovereign loans, and it mobilizes European Union grants as part of the Asia Investment Facility.