Pakistan seeks $2.5bn loan for ML-1 project

Pakistan has formally sought a $2.5 billion loan through an international consortium of lenders to finance the first phase of the long-delayed Main Line-1 (ML-1) railway upgrade project.

The Asian Development Bank (ADB) is expected to play a leading role in arranging the financing, potentially providing more than $1 billion. Other multilateral institutions, including the Asian Infrastructure Investment Bank (AIIB), the World Bank and other international lenders, are also expected to join the financing consortium.

The development came during a meeting between Federal Minister Ahsan Iqbal and an ADB delegation, where progress on the ML-1 project was reviewed. The ADB assured the government of continued close cooperation to ensure timely progress on the long-awaited railway project.

A senior government official told The News on Wednesday that around $2.5 billion would be required for the first financing tranche, which would be arranged through a consortium of international lenders. The official said the ADB would play a key role and could provide more than $1 billion in financing.

The government has set a target to complete the ML-1 design by October, after which procurement and other implementation stages are expected to begin at a faster pace. Prime Minister Shehbaz Sharif has also directed authorities to move quickly to bring the project into practical shape.

The ML-1 upgrade has remained stalled for nearly two decades. The project was originally conceived during the Pervez Musharraf-Shaukat Aziz government under the National Trade Corridor initiative, with the ADB initially playing a prominent role in arranging financial support.

Later, at Pakistan’s request, China included the project among key initiatives under the China-Pakistan Economic Corridor (CPEC). However, despite years of discussions, arrangements for financing the project could not be finalised between 2014 and 2026.

The ML-1 project envisages a major upgrade of Pakistan Railways’ main railway corridor and is considered crucial for improving passenger and freight services, reducing travel times and strengthening the country’s transport infrastructure.