The Asian Development Bank (ADB) is reportedly planning to provide around $2 billion in funding to take over the upgrade project of the Karachi to Rohri railway section in Pakistan. The project was originally a core part of the China-Pakistan Economic Corridor (CPEC) but was put on hold due to delays in Chinese financing.
In 2015, China announced the Belt and Road Initiative with a $60 billion investment to promote the CPEC, with a major project being the extensive upgrade of a 1,800-kilometer railway. The plan was for China Railway, a central state-owned enterprise, to lead the design and construction, with policy banks like the Export-Import Bank and the China Development Bank committing over $6 billion in loans. However, after a decade of negotiations, a concrete financing plan was never finalized. Meanwhile, Pakistan has been struggling with the huge debt pressure left by Chinese investments in power and infrastructure projects.
According to sources, the 500-kilometer railway upgrade section taken over by the Asian Development Bank was originally part of the CPEC plan but had to seek alternative solutions due to the delayed Chinese funding. This railway segment connects the southern commercial hub of Karachi to Rohri and will link to the Reko Diq mining area for transporting copper ore to the port.
The Reko Diq copper-gold mine being developed by Canadian Barrick Mining Corp has world-class reserves and is expected to start production in 2028. It is considered Pakistan’s largest foreign investment project, with an annual production capacity of about 200,000 tons of copper concentrate. A senior Pakistani official warned that without modernized railways, they would face a crisis in transporting the ore.
The Asian Development Bank has not confirmed specific plans but mentioned ongoing discussions with the Pakistan government on railway sector development, emphasizing that any assistance must align with its policies and undergo due diligence. However, insiders revealed that a financing plan could be announced later this month, with the bank leading a consortium and introducing international engineering contractors through a bidding process. The President of the Asian Development Bank is expected to visit Islamabad next week.
Earlier this week, the Asian Development Bank announced a $410 million financing for the Reko Diq mine itself. Project Director Tim Cribb stated that they would work with the government to ensure funding for the transformation of the mine access road.
On the diplomatic front, Pakistani officials emphasized that this move would not jeopardize their relationship with China, with China still claiming to be Pakistan’s “all-weather strategic cooperative partner.” However, observers generally see the Asian Development Bank taking over the railway upgrade as a sign of China’s weakening momentum in advancing its investment projects in Pakistan.
Since 2015, China has been promoting multiple power and infrastructure projects in Pakistan, but in recent years, the momentum has visibly waned. Pakistan has also been in negotiations with China to restructure debt from power plants due to outstanding electricity bills and cost disputes.