World Bank approves $400m to boost water, sanitation and cities in Punjab

World Bank Country Director for Pakistan, Bolormaa Amgaabazar, said the initiative is critical for improving public health outcomes, particularly for children.

The World Bank’s Board of Executive Directors has approved $400 million in financing for a major new initiative aimed at improving access to safely managed water, sanitation and hygiene services while strengthening urban governance across Punjab province in Pakistan.

The Punjab Inclusive Cities Program (PICP) will support large-scale upgrades to urban infrastructure and institutions in 16 secondary cities. The programme will finance the rehabilitation and expansion of water supply networks, sewerage systems and wastewater treatment plants, alongside investments in stormwater drainage to reduce flooding risks. It will also improve the performance of solid waste management systems, including the sanitary disposal of waste.

A core objective of the programme is to strengthen the institutional and financial capacity of local governments, enabling them to deliver services more sustainably, improve cost recovery and increase local revenues. By combining infrastructure investment with reforms in urban management, the programme aims to ensure long-term service reliability rather than short-term fixes.

World Bank Country Director for Pakistan, Bolormaa Amgaabazar, said the initiative is critical for improving public health outcomes, particularly for children.

“Reducing child stunting is essential for Pakistan’s future,” she said. “Through the Punjab Inclusive Cities Program, we are investing in safe water, sanitation and hygiene services to break the cycle of malnutrition and disease that prevents so many children from reaching their full potential.”

The programme is expected to deliver improved water, sanitation, hygiene and drainage services to around 4.5 million people, while enhanced solid waste management services will benefit an additional 2 million residents. These improvements are projected to reduce healthcare costs by lowering the incidence of waterborne diseases, improve child nutrition outcomes, and strengthen the overall resilience of urban services.

According to the World Bank, the programme also supports climate adaptation by helping cities better withstand floods and droughts through improved drainage, wastewater treatment and environmentally responsible urban planning.

“The program complements infrastructure investments with capacity building and revenue generation, helping to ensure that service delivery is well sustained,” said Amena Raja, Senior Urban Specialist at the World Bank. “It will also help Punjab’s cities become more resilient to climate change.”

Gender inclusion is a key feature of the Punjab Inclusive Cities Program. The initiative prioritises the hiring of women, particularly in decision-making roles, establishes gender complaint desks, and provides targeted training to help female workers develop new skills and progress in their careers. Community-level campaigns will also promote improved hygiene practices at the household level, supporting better long-term health outcomes.

The programme seeks to mobilise private capital to support water and sanitation services in Punjab’s secondary cities, helping to diversify financing sources and reduce reliance on public funds alone.

PICP aligns with Pakistan’s national development priorities and supports ongoing provincial initiatives, including the Punjab Development Program and the Suthra Punjab Program. It represents the second phase of the World Bank-supported Pakistan Urban Water, Sanitation and Hygiene Services Multiphase Programmatic Approach.

Pakistan has been a member of the World Bank since 1950. Over that period, the institution has provided more than $48.3 billion in assistance to the country. The current World Bank portfolio in Pakistan includes 54 projects with a total commitment of $15.7 billion. The International Finance Corporation (IFC) has invested around $13 billion in Pakistan since 1956 across sectors such as energy, infrastructure, healthcare, housing and trade.