EU to provide Pakistan €87m for 'green' economic growth

The European Union on Monday signed agreements for three new development programmes with funding of €87 million to support green and inclusive economic growth in Pakistan.

According to a press release issued by the EU on Monday, the agreements were signed by Dr Kazim Niaz, Secretary Ministry of Economic Affairs Division (EAD) and Dr Riina Kionka, Ambassador of the European Union (EU).

The programmes are part of the European Union’s support to Pakistan in the post-flood rehabilitation and reconstruction and are designed in close cooperation with the federal and provincial governments.

These projects will focus on Khyber Pakhtunkhwa (KP), Gilgit Baltistan (GB), and Balochistan and aim to improve agricultural value chains, provide access to clean energy and enhance the availability of the skilled labour force.

They are also part of the broader coordination efforts by the EU and its member states materialised through the Team Europe Initiative and contribute to EU’s Global Gateway, an overarching initiative to link the digital, energy and transport sectors and to strengthen health, education and research systems across the world.

The EAD secretary, according to the press release, said that for Pakistan, the EU is a “valued development partner”, especially in terms of the socioeconomic development of vulnerable communities.

Expressing hope that the three agreements would contribute toward strengthening socioeconomic indicators, such as the rural economic transformation, provision of cheap energy and imparting much-needed technical training for the youth, he said that the EU support was necessary for providing desired impetus to Pakistan’s green and clean efforts.

The EU ambassador expressed hope that the programmes will enable Pakistan to better utilise the skills of its people and its natural resources, especially given the large-scale devastation caused by the recent floods.

“Our support comes at a crucial moment,” the ambassador said, “as the country is grappling with an economic crisis and people are still struggling with the effects of the terrible floods. We hope that the three programmes signed today contribute to economic recovery in the aftermath of the floods and make Pakistan stronger and more resilient.”

The programmes

The KP Rural Economic Transformation (KP-RET) Project which will cost €17 million aims to improve rural households’ income by supporting farmers in the transition towards more sustainable and profitable agriculture, creating employment opportunities and focusing on youth and women. 

KP-RET is part of a larger agricultural development programme led by the KP government and the EU contribution will ensure that the most vulnerable communities in rural areas are assisted.

Another project called "ENERGY Plus: Energy for Climate Resilience" in Gilgit-Baltistan and Chitral district in Khyber Pakhtunkhwa will need an investment of €30 million and will aim to create resilient hydropower facilities and support more efficient use of energy for a sustainable transition to renewable energy. 

This programme will also include a massive tree planting programme, to ensure sustainable management of natural resources.

The third programme being launched as part of the agreement focuses on imparting demand-driven Technical and Vocational Education and Training (TVET) to people, and will cost €40 million. 

This programme will work on the provision of adequately skilled labour with a focus on environment-friendly skills in the agribusiness, water and energy sub-sectors. The programme aims to make the national TVET system more effective, providing migrants with opportunities for returning.

It can be reiterated here that the EU approved a grant of €350,000 (nearly Rs76 million) in August 2022 to provide crucial humanitarian assistance to flood-affected families.