ISLAMABAD — The prime minister of Pakistan announced on Wednesday a groundbreaking agreement with the World Bank, which will provide $20 billion in funding over a decade to bolster investment in renewable energy, education, and social programs.

In a message shared on the X platform, Shehbaz Sharif expressed his optimism regarding the agreement, known as the Country Partnership Framework for Pakistan (CPF), stating that it symbolizes the World Bank’s trust in the resilience and future potential of Pakistan’s economy.

Earlier in 2023, Pakistan faced the possibility of defaulting on its foreign debt obligations, only to be rescued by the International Monetary Fund, which approved a $3 billion bailout. The previous year, Pakistan had negotiated a new loan agreement worth $7 billion with the IMF. Since those interventions, the economic situation in the country has seen some improvement, with weekly inflation rates dropping from 27% in 2023 to just 1.8% recently. Sharif has committed to decreasing reliance on foreign loans moving forward.

The World Bank’s financial support for Pakistan is set to initiate in 2026.

Najy Benhassine, the World Bank Country Director for Pakistan, remarked that this decade-long partnership framework underscores a sustained commitment to tackling critical development challenges within the nation, including issues such as child stunting, learning poverty, the impact of climate change, and the sustainability of the country’s energy sector.

This latest agreement comes at a crucial time as Pakistan grapples with one of the most severe economic crises in its history, relying on loans from the International Monetary Fund and other allied nations, including China, the United Arab Emirates, and Saudi Arabia.