Pakistan fulfils IMF condition with new PPP risk assessment system

The government has introduced a new monitoring framework to assess financial risks linked to Public-Private Partnership (PPP) projects, fulfilling another commitment made to the International Monetary Fund (IMF) to protect the economy from fiscal shocks.

According to the Ministry of Finance, PPP projects have created a fiscal burden of up to Rs472 billion on the government. Under the new system, the federal government and all provinces will be required to submit biannual reports on their PPP projects.

The ministry said the liabilities include Rs368 billion related to contingent and development cost overruns, while more than Rs150 billion is linked to increased project costs. Financial guarantees account for Rs104 billion of the total obligations.

Data collected from 36 PPP projects across the country shows Sindh carries the highest fiscal risk, amounting to Rs335.6 billion. Federal government PPP projects account for liabilities of Rs90.6 billion, while Punjab’s share stands at Rs26.5 billion.

The finance ministry said the figures are based on provisional estimates as of December 2025.

Officials noted that financial risks associated with PPP agreements often do not immediately appear in budget documents. Under the new framework, PPP-related risks and liabilities will now be disclosed in fiscal and debt reports.

The ministry added that minimum revenue guarantees, interest rate exposure, exchange rate volatility and rising project costs remain key risk factors in PPP arrangements.