Islamic Republic of Pakistan: Enabling Asset Leasing as a Financing Approach for Schools (ADB-55289-001)

  • South Asia
Geographic location where the impacts of the investment may be experienced.
  • Pakistan
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • Asian Development Bank (ADB)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Dec 8, 2021
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Islamic Republic of Pakistan
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
  • Education and Health
  • Technical Cooperation
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Advisory Services
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 0.20 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ ADB website

Updated in EWS Apr 29, 2022

Disclosed by Bank Dec 8, 2021

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

According to ADB documents, the proposed technical assistance will support the preparation of a feasibility report to evaluate various education sector-focused asset leasing models for procuring school equipment, infrastructure-facilities, and services by public and private sector schools in Pakistan. The TA will also develop a program implementation plan and operations model with appropriate private sector participation.


1. Pakistan has recorded significant improvements in overall school participation and educational attainment. However, it faces severe challenges in providing high-quality and adequate education to eligible children, with its primary gross enrolment ratio increasing from 49.1% in 1980 to 94.0% in 2019. Schools lack basic infrastructure-facilities and services, including electricity, toilets, and information and communication technology labs for students and teachers, creating an unfavourable learning and teaching environment. Schools also suffer from a high student to teacher ratio (number of students per teacher) and stands at 44 for primary schools across the country (footnote 3). Despite improvements made in existing schools and establishment of new schools, poor overall facilities and lack of basic facilities continue to remain as the primary reason for high student dropouts. Of the total school buildings in Pakistan, 55% have fallen into disrepair and are considered unsafe or of low quality. Only 52% of public schools have boundary walls, electricity, drinking water and toilets, while 11% of public schools have none of these.

2. Experiences, especially in the United Kingdom, have shown that asset leasing as a financing modality for procuring equipment by schools has several advantages. Asset leasing (i) leads to more efficient management of school finances; (ii) increases the affordability of schools in procuring higher standard of equipment with a lower upfront cost; (iii) reduces the burden of asset disposal beyond useful life, allowing for the latest technologies and replacement equipment to be paid for over the period the equipment is used.

3. In Pakistan, leasing is a licensed activity that is performed either by commercial banks or by non-banking finance companies (NBFCs) or Mudarabah. Although the leasing industry in Pakistan has a market value of approximately $206 million and has diversified to industrial machinery, automobiles, and computer hardware, it is still a relatively nascent industry. It lacks innovative products and is confined mostly to small and medium ticket leasing particularly involving vehicles and machinery. Its challenges include resource mobilization constraints relating mainly to the currently volatile interest rate scenario, squeezing of margins, and non-availability of long-term funds and difficulties in recoveries. The leasing of machinery and other industrial equipment has slowed down due to the COVID-19 induced recession.


Providing fair and equal opportunity to all children to receive a high quality of education.

Investment Description
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Responsible ADB Officer Hegde, Abhishek Naveen
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Office of the Director General, CWRD
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