The Economic Coordination Committee (ECC) on Friday approved Rs. 72 billion in financing to support the construction of 50,000 housing units under a new scheme aiming to expand access to affordable housing.
The scheme, presented by the Ministry of Housing and Works, targets first-time homeowners and offers housing finance for up to 20 years. The financing will be subsidized at a fixed rate for the first 10 years, followed by market-based rates for the remaining period. Under the initiative, financial institutions will receive 10% risk coverage on outstanding portfolios on a first-loss basis to encourage wider participation.
Loans will be categorized under two tiers: up to Rs. 2 million under Tier-I and between Rs. 2 million to Rs. 3.5 million under Tier-II. The maximum loan tenure is 20 years, and borrowers will benefit from zero processing costs and no prepayment penalties. Eligible housing units include properties up to 5 marla or flats measuring up to 1,360 square feet.
The scheme would be accessible through commercial banks, Islamic banks, microfinance banks, and the House Building Finance Company Limited. To qualify, applicants must be first-time homeowners with valid identity cards and no property ownership.
The Pakistan Housing Authority Foundation would manage the project, with the Naya Pakistan Housing Authority dissolved to avoid duplication.
Green Taxonomy
During its meeting, the ECC also approved Pakistan’s first Green Taxonomy framework, proposed by the Ministry of Climate Change and Environmental Coordination. The framework aims to streamline financing for environmentally sustainable projects and help attract green investments.
To support education and skills development, the ECC also approved a government guarantee of Rs. 1 billion for the Pakistan Skill Impact Bond. This outcomes-based financing model is expected to enhance job skills training and employability. The Ministry of Federal Education was encouraged to adopt Public-Private Partnership models in the future to reduce dependence on sovereign guarantees.
Reforms
The ECC also approved a proposal from the Ministry of Information Technology and Telecommunication to revise charges for Radio-Based Services. It directed the ministry to ensure periodic revisions every three to five years, aligning with economic shifts and tech advancements. Additionally, the committee endorsed changes to the advisory committee overseeing the release of IMT spectrum to support next-generation broadband services.
In another major decision, the ECC formally recognized ship breaking and recycling as a legitimate industry. This designation, recommended by the Ministry of Maritime Affairs, will enable the sector to benefit from industrial power tariffs. The committee, however, instructed further data coordination with the Power Division for accurate impact assessment.