Pakistan: Reconstruction of National Highway N-5 under Pakistan's Resilient Recovery, Rehabilitation and Reconstruction Framework Project

approved

As part of AIIB's USD 1 billion Geneva pledge in response to the 2022 floods, the Project aims to enhance climate resilience, operational efficiency, and road safety by reconstructing and upgrading critical four-lane sections of the N-5 into a safer, climate-resilient, six-lane dual carriageway. It supports phase 1 of the NHA's 20-year, four-phase plan to upgrade the entire 1,819-kilometer N-5 corridor. The Project adopts a multi-tranche financing approach, the implementation of which will be carried out over five years through two subphases, 1A and 1B. The financing of the Project will be committed in phases through two loan tranches, corresponding to two separate loan agreements. This phased approach aligns with implementation readiness and supports the staged construction rollout, enabling effective management of multiple construction sites spread across a broad geographic area. Subphase 1A will reconstruct three priority sections of N-5 totaling 141 km: Ranipur-Sukkur (70 km) in Sindh Province, Rawalpindi-Hasanabdal (40 km) in Punjab Province and Islamabad Capital Territory, and Nowshera-Peshawar (31 km) in Khyber Pakhtunkhwa (KP) Province. Subphase 1B will reconstruct the Lahore-Gujranwala section (68 km) in Punjab Province and the Nai Baran Bridge (1km) in Sindh Province. Triggers for AIIB Management to commit the second loan tranche for subphase 1B include: at least 15 percent completion of both physical work and disbursement under subphase 1A, disbursement of at least 80 percent of Resettlement and Rehabilitation (R&R) funding to eligible beneficiaries in subphase 1A, and high readiness of the Resettlement Action Plan (RAP) implementation for subphase 1B, among others set forth in section 4.10 of the Project Document. To strengthen project preparation, AIIB has mobilized a USD 2 million Project Preparation Special Fund (PPSF) grant, supporting enhanced assessments on climate resilience, road safety, environmental and social (ES) safeguards, and digital project management tools. The Project marks AIIB's first standalone infrastructure investment in Pakistan.