ISLAMABAD, October 23, 2026: China’s expanding contributions to multilateral development banks and international climate financing mechanisms could create new opportunities for Pakistan to secure affordable funding for infrastructure, renewable energy and climate-resilient development, according to economic and climate experts.
A study released by the Washington-based Center for Global Development (CGD) on October 8 found that China’s annual contributions to development-focused multilateral institutions had increased more than tenfold since 2010, exceeding $3 billion in 2024.
The study also estimated China’s attributable multilateral climate finance at approximately $5.3 billion in 2025, reflecting Beijing’s growing participation in international efforts to support climate action and sustainable development.
The findings come as developing economies face mounting infrastructure requirements, increasing exposure to climate-related disasters and limited fiscal resources to finance large-scale development projects.
Experts believe China’s expanding role in internationally governed financial institutions could complement its existing bilateral economic partnerships, including cooperation with Pakistan under the China-Pakistan Economic Corridor (CPEC).
Climate financing could help bridge investment gaps
Speaking to Wealth Pakistan, Abdul Jabbar, a climate expert at the Climate Resourcing Coordination Center, said China’s increasing participation in multilateral climate financing could help address funding shortages faced by developing countries.
He explained that countries highly vulnerable to climate change often struggle to secure affordable, long-term financing for adaptation projects and energy-transition investments.
According to Jabbar, greater contributions from major economies could strengthen the financial capacity of international development institutions and support projects that might otherwise remain financially unviable.
“Countries such as Pakistan require long-term and affordable capital for flood protection, water conservation, renewable energy, resilient transport infrastructure and climate-smart agriculture. Greater participation by major economies in multilateral climate financing mechanisms could expand the resources available for these investments and encourage additional funding from other development partners,” he said.
Jabbar noted that climate financing was becoming increasingly important as developing countries sought to protect agricultural production, infrastructure and economic activity from extreme weather and changing environmental conditions.
He said multilateral financing mechanisms could provide opportunities for investment in sustainable infrastructure, climate adaptation and renewable energy, particularly where domestic resources were insufficient.
Strong project preparation essential to attract funding
Despite the growing availability of international climate financing, Jabbar cautioned that developing countries could not expect funding solely because of their exposure to climate-related risks.
He stressed that access to multilateral financing increasingly depended on the quality of project preparation, environmental safeguards, financial planning and measurable development outcomes.
“Pakistan cannot rely solely on its vulnerability to climate change as a justification for attracting international financing. It needs technically sound, financially credible and implementation-ready projects that clearly demonstrate how investments will reduce climate risks or support emissions reduction,” he said.
The expert called for stronger institutional capacity to develop credible investment proposals supported by technical assessments and effective implementation arrangements.
He said Pakistan could benefit from closer cooperation with Chinese financial institutions and multilateral development banks by improving its ability to design and implement projects involving modern technologies and sustainable infrastructure.
Such partnerships could strengthen technical expertise and improve the financial viability of investments in water management, renewable energy, climate-resilient infrastructure and other priority sectors.
Jabbar also emphasised the importance of transparent monitoring and evaluation to ensure that financing commitments resulted in completed projects with measurable benefits.
“Transparent reporting, credible project evaluation and effective implementation will be essential if Pakistan wants to build investor confidence and secure a larger share of international climate finance,” he said.
Multilateral financing could complement CPEC cooperation
Dr Khalid Waleed, Research Fellow at the Sustainable Development Policy Institute (SDPI), said China’s growing engagement with multilateral development institutions could introduce new opportunities for Pakistan to expand economic cooperation beyond traditional bilateral financing arrangements.
Speaking to Wealth Pakistan, he noted that Chinese investment had already supported Pakistan’s energy and transport infrastructure, particularly through CPEC.
He said the next phase of cooperation should focus on projects that strengthen economic productivity, improve climate resilience and promote environmentally sustainable development.
“Pakistan has already benefited from Chinese cooperation in energy and transport infrastructure. The next stage should focus on attracting financing for projects that improve economic productivity, strengthen climate resilience and create sustainable development opportunities. Multilateral partnerships can help make these investments more financially viable and institutionally sustainable,” he said.
Waleed explained that financing through international development institutions could complement existing bilateral partnerships by providing access to additional capital, technical expertise and internationally recognised project standards.
He said Pakistan should align its investment priorities with emerging opportunities in green financing, regional connectivity and sustainable industrial development.
According to the researcher, projects involving cleaner energy systems, climate-resilient infrastructure and sustainable industrial activity could support economic growth while reducing exposure to environmental risks.
Global development institutions gain importance
China’s expanding financial participation also reflects the growing importance of multilateral development institutions in addressing challenges that extend beyond national borders.
These institutions play a significant role in supporting infrastructure development, providing concessional financing and facilitating investments that deliver long-term economic, social and environmental benefits.
Greater contributions from major economies could strengthen their capacity to finance development programmes in countries that face difficulties accessing affordable commercial loans.
For Pakistan, such arrangements could provide an additional channel for attracting investment in priority sectors while reducing reliance on conventional financing sources.
However, experts emphasised that greater access to international resources would require improved coordination among government departments, development partners and project implementation agencies.
They said recipient countries needed to demonstrate their capacity to prepare bankable projects, comply with financing requirements and use available resources effectively.
Pakistan urged to focus on implementation and transparency
Both experts highlighted the need to translate international financing opportunities into practical development outcomes.
They stressed that Pakistan should strengthen project preparation, improve institutional coordination and establish transparent mechanisms for evaluating the performance of climate-related investments.
China’s growing participation in multilateral development and climate financing could offer Pakistan opportunities to combine infrastructure modernisation with environmental sustainability and long-term economic productivity.
Nevertheless, experts said the country’s ability to benefit would depend largely on its readiness to develop financially viable projects, attract investment partnerships and ensure effective implementation.
They maintained that stronger technical capacity, credible financial planning and transparent project management would be essential for securing a greater share of international development and climate financing.