The United States is re-emerging as a pivotal economic partner for Pakistan, underscored by the $7 billion financial close of the Reko Diq project backed by the International Finance Corporation (IFC) and the US EXIM Bank, said Finance Minister Muhammad Aurangzeb on Thursday during a high-level panel discussion in Riyadh.
The session, Climate Adaptation & Resilience: How do we secure the capital we need?” at the Global Development Finance Conference – Momentum 2025, was attended by senior global finance leaders including H.E. Zeina Toukan, Minister of Planning and International Cooperation of Jordan; H.E. Qahhorzoda Faiziddin, Minister of Finance of the Republic of Tajikistan; and Mr. Serge Ekue, President of the West African Development Bank, explored the rising challenges of climate adaptation for emerging economies, read a statement.
During the session, Aurangzeb noted that Pakistan’s relationship with the United States has strengthened significantly, particularly in sectors such as minerals and mining, and advanced technologies including AI, blockchain and digital infrastructure.
Discussing Pakistan’s flagship copper mining project, Reko Diq, the finance minister described it as a “transformative development” for the country’s economic and energy transition future.
“The project’s financial close valued at $7 billion, with IFC leading the syndication and the US EXIM Bank joining as a key participant, marks a major milestone,” he said.
‘Positive updates’ shared on Reko Diq financial close, says Petroleum ministry
Aurangzeb highlighted that the mine is projected to generate export revenues equivalent to 10% of Pakistan’s current export base by its first year of commercial operation in 2028, establishing it as a major driver of growth and foreign exchange earnings.
He added that Pakistan anticipates strong interest from the US, China, GCC and other international investors as the project scales, contributing both to national development and to global supply chains for energy transition materials.
When asked about navigating geopolitical dynamics between major powers, the finance minister said that Pakistan maintains an “and-and” approach to global partnerships.
“China remains a longstanding ally, particularly through the China-Pakistan Economic Corridor (CPEC), whose first phase focused on critical infrastructure,” he said. Pakistan has now launched CPEC Phase 2.0, which aims to commercialise this infrastructure through business-to-business partnerships, building on earlier government-to-government cooperation.
He affirmed that Pakistan “is well-positioned to maintain constructive relationships” with both the United States and China.
Speaking on Pakistan’s recent experience with extreme climate events, the finance minister highlighted that climate change is an increasingly tangible and costly reality for Pakistan.
Recalling the devastating floods of 2022 that caused an estimated $30 billion in losses and the renewed flooding witnessed this year, he noted that the frequency and intensity of such disasters are accelerating. As a result, Pakistan expects to lose roughly half a percentage point of GDP growth this year, he said, placing additional strain on an already challenged emerging economy.
Aurangzeb stated that Pakistan’s commitment to macroeconomic stability has enabled the creation of adequate fiscal and external buffers to manage immediate rescue and relief efforts through domestic resources. However, he emphasised that rehabilitation and reconstruction require substantial external support.
He noted the positive progress made through the establishment of an AI-enabled early warning system at Pakistan’s National Emergency Center, which provides month-by-month climate forecasts that will allow more proactive planning and rapid response. Even so, he stressed that Pakistan’s own resources remain insufficient to meet the scale of adaptation needs, making multilateral partnerships and private sector engagement essential.
He highlighted the Government of Pakistan’s 10-year Country Partnership Framework with the World Bank Group, which allocates roughly $20 billion, one-third of which is dedicated to climate resilience and decarbonization. The minister underscored that the responsibility now lies with Pakistan to develop high-quality, bankable investment projects with urgency to unlock these funds.
He expressed concern that global climate financing mechanisms, such as the Green Climate Fund and the Loss and Damage Fund, remain slow and bureaucratic, with lengthy accreditation processes that hinder timely access for vulnerable countries.
In contrast, Pakistan has begun to effectively mobilise support through multilateral channels, including the recent receipt of the first tranche of $200 million under the IMF Climate Resilience Fund, said Aurangzeb.
He reiterated that while fiscal resources will continue to be allocated domestically, external financing from development partners and international capital markets remains indispensable for Pakistan’s adaptation agenda.
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