Pakistan’s worsening water crisis has been partially eased after the bankrupt nation secured a €60 million loan from the European Union to provide clean drinking water to its citizens. This amount to advance a key sewage and wastewater management project in Karachi is the first loan declaration signed in a decade.

Bankrupt Pakistan secures Rs 6342300000 loan

The agreement for approximately Rs 6342300000 loan was signed by Economic Affairs Secretary Muhammad Humair Karim and Head of the EIB’s Asia Pacific Division Edvardas Bumsteinas, on the sidelines of the 15th Pakistan-European Union (EU) Joint Commission in Brussels.

Lack of access to clean water

Amid a severe clean water crisis, it is doubtful whether Pakistan will utilize the funds for the intended purpose, as the nation deals with a rapidly growing population. Millions in Karachi do not have access to tap water and depend on water tankers. The quality of water has led to widespread waterborne diseases, especially in impoverished areas. The loan stands as a beacon of hope for Islamabad to prevent the situation from turning dire.

The declaration formalises the European Investment Bank’s financing for the Water Infrastructure Framework project in Karachi to support the rehabilitation and construction of water treatment facilities. With a package of approximately €60 million, Pakistan can now expand safe water supply for its rapidly growing population.

Pakistan secures EU loan after a decade

In a social media post, the delegation of the European Union to Pakistan wrote, “Today, the EU signed its first loan agreement with 🇵🇰 Pakistan in a decade: a €60 million loan supporting the delivery of clean drinking water for Karachi.”

The borrowing system continues

This is, however, not the first time Pakistan has secured a loan to overcome a crisis. It has a history of a continuous borrowing system from the IMF, World Bank, and others to stabilize its reserves and finance expenses.