The United States has partially reinstated USAID funding to Pakistan following a suspension earlier this year. Islamabad has now received grants for two major projects: the US Need-Based Merit Scholarships for Pakistani University Students (Phase-II) and the FATA Infrastructure Program, both extended through June 2025.
This partial restoration comes after the US government suspended approximately $845 million in development aid in February 2025 under Executive Order 14169. The freeze primarily affected government-to-government and off-budget projects, including funds directed to NGOs working in Pakistan.
Officials from the US Embassy in Islamabad and Pakistan’s Economic Affairs Division (EAD) are currently in talks to broaden the reinstatement of USAID funding to Pakistan. These discussions focus on improving transparency and monitoring, especially regarding funds given directly to NGOs.
Pakistan has requested that future USAID grants to NGOs be routed through relevant government ministries. This proposal aims to enhance oversight and ensure that projects align with national development goals. Currently, ministries often lack clear visibility over NGO funding amounts and beneficiaries.
The USAID funding to Pakistan has a long history, marked by significant agreements like the Pakistan Enhanced Partnership Agreement (PEPA) signed in 2010. More recently, a five-year Development Objectives Assistance Agreement (DOAG) worth $445.6 million was signed in 2023 to support climate resilience, governance, and health improvements.
Additionally, an amendment to PEPA added $407 million in 2023, further strengthening development cooperation between the two countries.
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