On August 11, 2026, the World Bank expressed serious dissatisfaction with the way Pakistani authorities were handling funds linked to housing reconstruction for flood victims in Balochistan, southwest Pakistan. According to Pakistan’s Dawn, the dispute emerged after funding for resilient housing was capped and resources redirected towards infrastructure projects. Its country director for Pakistan, Bolormaa Amgaabazar, warned that excluding eligible families could deepen poverty and vulnerability in one of the country’s most disadvantaged regions. A day later, The Express Tribune described the dispute as “deeply troubling” and called on the government to explain why its funding priorities had changed.
At the heart of the dispute are 119,049 households that, according to the World Bank, have already been verified and deemed eligible for housing support but remain without identified financing. Around 84 per cent of eligible families are classified as ultra-poor or vulnerable.
The roots of the controversy lie in the catastrophic floods of 2022, which destroyed homes, crops, roads and livelihoods across Pakistan, with Balochistan among the provinces hit hardest. The international financing that followed was intended not merely to repair the damage but to make affected communities more resilient to future disasters. Europe was among the largest contributors. Team Europe, the European Union and its member states acting jointly, put more than €930 million into the flood response, according to the EU delegation in Islamabad.
In May 2023, the World Bank approved $213 million (€184 million) for the Integrated Flood Resilience and Adaptation Project (IFRAP), designed to support flood-affected communities while strengthening their resilience. The programme included grants to reconstruct approximately 35,100 homes to more resilient standards, alongside the rehabilitation of roads, irrigation systems, water infrastructure and other essential services.
The World Bank’s warning is especially striking because the floods damaged more than 190,000 housing units across Balochistan. What began as an emergency reconstruction challenge has therefore become a test of whether Pakistan can translate internationally financed commitments into results for its most vulnerable citizens. The longer the financing gap persists, the harder it becomes to describe it as a temporary problem rather than a failure of delivery and accountability.
As the programme expanded, additional financing sought to extend housing reconstruction to more eligible households in Balochistan, raising the number of housing grants from 35,100 to 102,000. By December 2025, World Bank figures showed that 231,749 beneficiaries had been verified against an overall baseline of 284,312. Yet on June 22-23, 2026 the Project Steering Committee, chaired by planning minister Ahsan Iqbal and Balochistan chief minister Sarfraz Bugti, capped housing support, redirected resources towards infrastructure and turned down a further $180 million (€155 million) offered by the Bank, leaving 119,049 eligible households without an identified source of financing.
That distinction matters. The controversy is not about whether these families qualify for assistance; that determination has already been made. It is about whether the financing required to deliver that assistance will ultimately be there.
Balochistan undoubtedly needs infrastructure. The 2022 floods damaged 2,222 kilometres of roads and 43 bridges, alongside extensive damage to irrigation and flood-protection infrastructure, cutting communities off from markets, healthcare and essential supplies. Such infrastructure was part of IFRAP from the beginning, and strengthening it can protect entire communities from future disasters.
But that is not the question. The question is why financing infrastructure should require reducing housing support for already eligible flood victims. Once one reconstruction priority is funded at the expense of another, a development-policy choice becomes a matter of accountability. Pakistani authorities should explain how much funding was redirected, where it went, what criteria determined the change and what plan now exists for those left without financing.
Concerns about fraud and mismanagement complicate the picture but do not resolve it. Pakistani media have reported concerns over alleged record tampering and duplicate beneficiary claims. Such allegations must be taken seriously. If irregularities are substantiated, authorities have an obligation to identify those responsible and protect reconstruction funds.
But fraud requires targeted investigation, not blanket restrictions on legitimate beneficiaries. How many claims have actually been established as fraudulent? What proportion of the programme do they represent? And, crucially, how many of the 119,049 eligible households are implicated? As The Express Tribune has argued, suspicious claims should be addressed through targeted action rather than measures that penalise legitimate beneficiaries.
The human consequences make those questions harder to dismiss. Some 37 per cent of eligible households depend on daily-wage labour. Twenty-eight per cent of beneficiaries have monthly incomes below $30 (€26), while another 26 per cent earn between $31 and $70 (€27 and €60).
For these families, a home is not simply an asset. It is a foundation of economic security. Without safe housing, families can face worsening health, greater indebtedness and pressure to divert scarce income from food or education. A temporary natural disaster can become a lasting poverty trap. World Bank estimates suggested that the 2022 floods could push between 8.4 million and 9.1 million additional Pakistanis into poverty. This is particularly consequential in Balochistan, where economic vulnerability long predates the floods.
Under such circumstances, rebuilding a home is not merely housing policy. It is anti-poverty policy. And when financing is withdrawn from those least able to absorb another economic loss, the question is no longer simply how development resources are allocated. It is whom a reconstruction programme ultimately chooses to protect.
Balochistan also poses a broader test for Pakistan, the World Bank and Europe. The 2022 floods caused more than $30 billion (€25.9 billion) in damage and economic losses across Pakistan and became a powerful symbol of the unequal burden imposed by climate-related disasters. Yet international climate finance cannot be judged solely by the sums approved by lenders or transferred to governments. Pakistan has a responsibility to account for how internationally backed reconstruction funds are used; the World Bank, having financed and supervised IFRAP, has a responsibility to ensure that changes to the programme do not leave its stated beneficiaries behind. Brussels has its own stake. Pakistan is the largest beneficiary of the EU’s Generalised Scheme of Preferences Plus (GSP+), worth an estimated €732 million in tariff exemptions in 2024 in return for commitments on governance. The real test is not whether hundreds of millions of dollars are announced in Washington or disbursed in Islamabad. It is whether that financing reaches the communities it was intended to protect.
Pakistan’s response should therefore begin with full disclosure. The government should publish how much money was removed from housing, which projects received it, the criteria behind those decisions and the evidence of fraud or duplicate claims that influenced them. On August 14, 2026 the planning ministry maintained that the funds remained within Balochistan and said that the Project Steering Committee had ordered an independent high-level inquiry into the project’s implementation and performance. That investigation should have a clear timetable and its findings should be made public. The Bank, for its part, has already escalated. In a disclosure dated August 12, 2026 it downgraded implementation progress on IFRAP, now a $245 million (€211 million) project, to “moderately unsatisfactory”, and a technical mission found the project non-compliant with its own environmental and social standards because the scope had been changed without consulting those affected.
But transparency alone does not rebuild a home. Islamabad and the Balochistan authorities still need to present a credible plan for the 119,049 eligible households left without identified financing. If the remaining families are legitimate beneficiaries, though, the government must answer a simpler question: Who will finance their reconstruction, and when? If individual claims are fraudulent, reject them on the evidence and hold those responsible accountable.
