The loan will be paid during the next three years with an average annual loan of $1.5 billion, World Bank Vice President for South Asia, Praful Patel, told reporters in Islamabad.
Recent reports by international financial agencies have suggested Pakistan has made a considerable economic recovery under President Pervez Musharraf, but needs assistance to avoid a relapse.
The country's economy was on the verge collapse when Musharraf assumed power in 1999.
Patel said the World Bank loan will be used to support Pakistan's efforts at economic re-construction and to expedite social sector development.
"At present, the annual lending to Pakistan is about $900 million, which will be enhanced to $1.5 billion from fiscal year 2005-06, for a period of three years," said Patel, who was in Islamabad to participate in a meeting of the Pakistan Development Forum.
Half of the annual lending will be interest-free.
Patel heads the World Bank's South Asia wing, which deals with Pakistan, India, Bangladesh, Sri Lanka and Afghanistan.
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