• Govt to update project selection criteria for PSDP.
• Pakistan will report on the selection process.
• Pakistan will also implement adaptation assessment.

ISLAMABAD: Pakistan has agreed to the International Monetary Fund’s (IMF) demands to update project selection and raise climate change weighting criteria by August of next year, with a carbon fee that would be announced in the next budget, The News reported.

Pakistan has agreed to the IMF’s demand that all new infrastructure projects costing more than Rs7.5 billion should have their Planning Commission (PC-1) paperwork posted on the PC website. The government will enhance project appraisals and climate screening assessments to prioritise the infrastructure having most impact, the top official sources said.

The official said Pakistan and the global lender have decided to extend the federal government’s budget tagging system to include grant and subsidy spending. They will also use the same process to tag provincial government spending, the official added.

It also committed to the IMF to work towards tagging and tracking of climate-harmful expenditure and harmonising budget tagging with other green taxonomies. The government will update the project selection criteria for the Public Sector Development Programme (PSDP) to prioritise climate-friendly projects.

Climate change considerations will account for at least 30% of the selection criteria for infrastructure projects. A transparent scoring system will be developed with explicit protocols for evaluating projects.

The government will publish the distribution of scores for new projects by August 2026. Additionally, Pakistan will report on the selection process and publish scores for each project approved by the Central Development Working Party (CDWP) and Executive Committee of the National Economic Council (ECNEC) annually.

Pakistan will also implement adaptation and mitigation assessment till the end of August 2027. All new major infrastructure projects will undertake climate vulnerability, adaptation, and mitigation assessments as a critical requirement for inclusion in PSDP.