ISLAMABAD — The European Union and Pakistan signed three grant agreements worth €65 million ($74.6 million) on Monday, in a move aimed at helping Islamabad attract foreign investment, bring renewable energy to off-grid communities in its northwest, and improve access to justice.
The grants fall under the EU’s Multiannual Indicative Program 2021-2027 and form part of Global Gateway, the European Commission’s flagship infrastructure investment strategy. The initiative seeks to mobilize up to €300 billion in public and private investments worldwide between 2021 and 2027 across sectors including digital, energy and transport.
A Priority on Foreign Investment
Pakistan’s government has identified increasing foreign investment as a priority as it works to secure sustainable economic growth. In 2023, it established the Special Investment Facilitation Council, a hybrid body combining civilian and military officials, to draw international capital into key economic sectors.
“These agreements demonstrate the EU’s commitment to supporting Pakistan’s economic development and investment ambitions under our flagship Global Gateway initiative,” EU Ambassador Raimundas Karoblis said at the signing ceremony.
What the Three Programs Will Do
- Investment and fiscal reform: The first program aims to attract foreign investment by improving Pakistan’s tax system and strengthening the government’s long-term financial planning.
- Renewable energy in Khyber Pakhtunkhwa: The second will expand renewable energy access for rural communities in Khyber Pakhtunkhwa province that remain disconnected from the national grid. It will also provide training intended to draw private investment into the province’s energy sector.
- Access to justice: The third program, building on earlier EU assistance, will help people in Khyber Pakhtunkhwa and Balochistan access police, prosecution services, courts and legal aid.
Focus on Conflict-Affected Provinces
Both Khyber Pakhtunkhwa and Balochistan border Afghanistan and have borne the brunt of militant attacks in Pakistan in recent years. According to the research and data platform South Asia Terrorism Portal, Balochistan recorded the most violence in July, with 176 attacks and 438 deaths, compared with 143 incidents and 244 fatalities in Khyber Pakhtunkhwa over the same period.
The justice program will also support Punjab and Sindh, Pakistan’s most populous and industrialized provinces, in expanding alternative and commercial dispute resolution. The stated aim is to make both provinces more attractive to European and other companies looking to invest.
The EU’s development cooperation with Pakistan focuses on economic development, climate resilience, governance, the rule of law, human rights and the sustainable management of natural resources, according to the statement.
