- September 7, 2026
- Posted by: Tresmark
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The Asian Development Bank (ADB) is considering financing of up to $1.1 billion to upgrade the Karachi-Rohri section of Pakistan Railways’ Main Line-1 (ML-1), aiming to modernise a key passenger and freight corridor.
According to ADB project documents, the proposed financing would include $1 billion from ordinary capital resources and $100 million in concessional ordinary capital resources lending under a multitranche financing facility.
The project received concept clearance on June 18, 2026, while fact-finding is scheduled for January 11-22, 2027. The ADB has yet to announce a formal approval date.
The proposed project would cover around 480 kilometres between Karachi and Rohri, connecting Pakistan’s main port with the wider national railway network. The ADB has identified deteriorating railway infrastructure and its limited utilisation as major obstacles to transport efficiency, logistics competitiveness and sustainable economic growth.
The development lender noted that Pakistan’s transport investment has historically been heavily concentrated on roads, resulting in an imbalanced system in which roads handle most passenger and freight movement. Logistics costs are estimated at around 15% of GDP, while rail transport, particularly for bulk cargo, offers a cheaper and more environmentally friendly alternative but remains underused.
The proposed upgrade is expected to encourage a shift of freight from roads to rail while improving passenger mobility, safety and connectivity.
The investment would focus on climate-resilient and high-capacity railway infrastructure, port connectivity, modern signalling systems and improved railway operations. It would also support better maintenance, asset management and institutional capacity to ensure sustainable operations.
The ADB aims to improve the efficiency, safety and sustainability of railway services along the Karachi-Rohri corridor by 2040.
However, the bank has stressed that infrastructure development alone will not be enough. It said the investment needs to be supported by substantial institutional and financial reforms within Pakistan Railways.
The ADB is already involved in the sector through Project Readiness Financing approved in 2025 and is now considering follow-on multitranche financing alongside capacity-building and governance reforms.
The proposed project has been assigned a high environmental and social risk classification, given the scale and nature of the planned railway intervention. Safeguard requirements will cover environmental and social risk management, labour conditions, pollution control, health and safety, land acquisition, biodiversity, cultural heritage, climate-related risks and stakeholder engagement.
The project is also expected to generate broader social and poverty-reduction benefits. Improved railway services could provide rural communities, informal businesses, low-income households and vulnerable groups—including women, elderly people, persons with disabilities and children—with more affordable access to education, healthcare, markets and employment opportunities.
The proposed investment supports Pakistan’s wider transport policy objectives of shifting freight movement from roads to rail and upgrading critical railway infrastructure.
The ADB expects the programme to strengthen national and regional connectivity, lower logistics inefficiencies and improve economic competitiveness by creating a faster, safer, more reliable, affordable and environmentally sustainable railway system.
The potential Karachi-Rohri financing would mark a major expansion of multilateral support for Pakistan’s railway sector, combining large-scale infrastructure development with institutional reforms aimed at ensuring the upgraded network remains financially and operationally sustainable.
