ADB Moves Toward $1.1 Billion Financing for ML-1 Railway After Pakistan Dropped It From CPEC

The Asian Development Bank is finalising a $1.1 billion investment programme to rebuild the 480km Karachi-Rohri section of Pakistan Railways' Main Line-1 (ML-1), the country's core freight and passenger corridor — financing that is materialising months after Islamabad pulled the project out of CPEC altogether.

What the ADB is putting on the table

Of the $1.1 billion package, $1 billion would come from the ADB's ordinary capital resources and $100 million from its concessional ordinary capital resources lending. The multi-tranche facility is meant to fund climate-resilient infrastructure upgrades along the line, modernised signalling and operations, and institutional and capacity-building reforms for Pakistan Railways. A fact-finding mission is scheduled for January 2027, when ADB officials will work through project specifics with both the federal government and the Sindh government, which the Karachi-Rohri stretch runs through.

From a Chinese megaproject to a multilateral one

ML-1 has been the largest single item on CPEC's unfinished list for years, with its full scope — a 1,250km upgrade from Karachi to Peshawar — repeatedly estimated near $7 billion and repeatedly delayed over financing terms with Beijing. That changed on July 3, 2026, when the federal government told a National Assembly committee that ML-1 was being formally removed from CPEC and would instead pursue financing from the ADB and other lenders. The move followed a September 2025 arrangement in which Pakistan and China assembled a consortium of bilateral and multilateral partners — including the ADB and the Asian Infrastructure Investment Bank — to get the long-stalled project moving under new terms.

It's a notable contrast with the rest of CPEC, which is advancing on the Chinese-financed track: Beijing is funding 85% of the Karakoram Highway rebuild under CPEC Phase II, launched at September's 14th Joint Cooperation Committee meeting. ML-1 going the ADB route instead suggests Pakistan is now willing to split its infrastructure financing across different lenders project by project, rather than keeping everything inside the China relationship.

Why the Karachi-Rohri section first

The 480km Karachi-Rohri segment is the busiest and most commercially significant portion of the full ML-1 corridor, carrying the bulk of freight moving between Karachi's ports and the rest of the country. Narrowing the ADB's initial financing to this stretch, rather than the full Karachi-Peshawar line, mirrors how multilateral lenders have approached ML-1 before: project-readiness financing the ADB approved in 2025 covered preparatory design work, and officials have said since September that technical teams were working to finalise the project's design by October 2026 — a target that lines up with this week's announcement.

What it means for the IMF-era financing picture

An ADB-financed ML-1 would be one of the largest non-IMF capital commitments Pakistan has lined up this year, arriving as the country separately works to deepen its local-currency bond market for retail investors under an IMF-linked plan announced in September and holds its fourth EFF review with the Fund. The ADB has also been one of the more consistently upbeat voices on Pakistan's macro picture this year, holding its FY2027 growth forecast at 3.7% in September even as it flagged energy-price risk. A large multi-tranche railway facility would be a tangible test of whether that confidence translates into committed capital, not just forecasts.

What to watch

The January 2027 fact-finding mission is the next concrete checkpoint — it's where financing terms, disbursement schedules and the federal-Sindh cost-sharing arrangement get worked out in detail. Until then, ML-1's status remains what it has been for years: a project frequently described as close to groundbreaking, with the actual shovel still not in the ground.

Build Better Pakistan's Economy Desk tracks major infrastructure financing and its implications for Pakistan's public debt and growth outlook.