World Bank approves $1.1b for agro projects in Pakistan

Published: March 21, 2012

$840 million Tarbela IV Extension Hydropower Project will add power generation capacity of 1,410 megawatts. PHOTO: AFP/FILE

ISLAMABAD: The World Bank on Tuesday approved $1.1 billion loans for expansion of Tarbela dam to add another  1,410 megawatts of electricity into the grid and maximising benefits in the agriculture sector by introducing modern irrigation techniques.

The Executive Board of the Washington-based lending agency approved two projects totaling $1.09 billion aimed at supporting Pakistan’s growth agenda for reducing poverty, said the World Bank country office in an announcement on Wednesday.

The Tarbela IV Extension Hydropower Project will add power generation capacity of 1,410 megawatts, and the Punjab Irrigated Agriculture Productivity Improvement Project is geared toward maximizing water use efficiency for increased yield per unit of water, it added.

The availability of electricity is of crucial importance for the economic growth and development of Pakistan. Widespread loadshedding is disrupting the lives of Pakistanis and the economic impact of energy shortages is estimated at upward of 2 per cent of Gross Domestic Product, said the World Bank.

By developing its vast hydropower potential – of which only 15% has been developed so far – Pakistan can significantly reverse the situation and reduce the cost of energy supply mix, the statement added.

The $840 million Tarbela IV Extension Hydropower Project will use the existing dam, tunnel, roads and transmission line for generating additional electricity in summer months when demand for electricity and river flows are high.

“The Tarbela IV Hydropower Project will enhance Pakistan’s energy security by adding low-carbon, least-cost and renewable hydel power to its energy portfolio,” said World Bank Country Director for Pakistan Rachid Benmessaoud.

“The beauty of this project is that it will help Pakistan reduce the gap between supply and demand of electricity by maximizing the benefits of the existing infrastructure of Tarbela Dam without requiring any land acquisition or relocation of population,” siad Rachid. He added that the direct beneficiaries will be millions of energy users, including industries, households and farmers who would get more electricity at a lower cost and suffer fewer blackouts.

The challenges in the water sector are equally daunting. Pakistan’s water availability is shrinking while the demand is increasing. Vast amount of water is lost due to deteriorating watercourses and wasteful on-farm water use. Improved water use efficiency and new technology that promotes crop diversification will be critical going forward.

The $250 million Punjab Irrigated Agriculture Productivity Improvement Programme Project is aimed at getting maximum productivity out of each drop of the irrigation water by weaning farmers away from the traditional and wasteful flood irrigation to modern methods like drip and sprinkler irrigation systems, which in turn will encourage crop diversification.

“High efficiency systems to be installed in over 1,20,000 acres of irrigated lands in Punjab would promote water conservation and increase crop yields,” said World Bank’s Lead Water Specialist Masood Ahmad.

This would have a demonstrative effect and the local industry would develop after the installation of such systems as it happened in the case of ground water development over the last three decades after groundwater wells were installed by the government for controlling water logging and salinity.

Tarbela IV Extension Hydropower Project includes $400 million loan from the International Bank of Reconstruction and Development (IBRD), which is comparatively an expensive window.

The $400 million loan has a 21-year maturity period, including a grace period of 6 years. The remaining $440 million of Tarbela Project and US $250 million for Punjab Irrigated Agriculture Productivity Improvement Project are credits from the International Development Association (IDA), the World Bank’s concessionary lending arm.

These carry a 0.75% service charge, and 1.25% interest rate, a five-year grace period and a maturity of 25 years.

Reader Comments (28)

  • Pakistani Agnostic
    Mar 21, 2012 - 3:49AM

    Thanks World Bank!

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  • khan
    Mar 21, 2012 - 5:41AM

    This could not have been possible without the blessings of US… is this part of the Nato route real? Its pretty clear that the establishment have already finished all negotiations with US behind the door, and now the parliament will just be shouting for 2 days before signing the deal. Our foreign policy is made in pindi, and this deal bears a signature for its interference for sure.

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  • Travian
    Mar 21, 2012 - 6:25AM

    I bet $2 Billion not a penny is coming back. Any Takers. Just get $2 Billion and we shall talk.

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  • usman786
    Mar 21, 2012 - 6:39AM

    Further increase of debt to be paid back by my son???? WB must ensure if things are purchased for right priceRecommend

  • Deepak
    Mar 21, 2012 - 6:40AM

    Soo Pakistan is taking more kaffir money after imposing more unjust laws on them.

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  • Mar 21, 2012 - 7:25AM

    21032012 ET: We are told this repeatedly for the last sixty-five years. In addition, we are still going begging to the aid agencies. Bribe. Unimpressed.

    Editor: This news item is nicely placed. Right below the “western diplomats seeing the recommendations before its tabling.” Salams to Pakistan. (What a country).

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  • Mar 21, 2012 - 8:25AM

    Must have been with US blessings. Maybe an exchange for getting NATO routes through Pakistan cleared?

    I bet US will get NO thanks for approving this amount of money to Pakistan.

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  • vasan
    Mar 21, 2012 - 9:39AM

    O”Only 15% of the potential of the hydropower has been developed”. Still Pakistan pushing IP gas pipeline has to be a blackmailing strategy or utilise Iran’s offer of a near free gas.

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  • Mar 21, 2012 - 9:47AM

    “The direct beneficiaries will be millions of energy users, including industry, households and farmers who would get more electricity at a lower cost and suffer fewer blackouts.”

    Joke! i do not think we will get electricity at a LOWER COST. Because they just jacked up the tariff yesterday.

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  • Ahmer Ali
    Mar 21, 2012 - 10:07AM

    Much the best and excellent live example of getting self-reliance and sovereignty of Pakistan by the PPP’s government.

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  • shahani
    Mar 21, 2012 - 10:41AM

    BTW,when will we be getting that electercity?

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  • Truth Teller
    Mar 21, 2012 - 11:54AM

    We should be GRATEFUL to World Bank & who ever helped us in getting this money! For a change let’s say “Thank You”.

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  • Mar 21, 2012 - 1:09PM

    will world bank monitor the money spendings?

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  • M.S
    Mar 21, 2012 - 1:26PM

    Word of Advice to ET” Can you keep up with the speed of news. This news came at 7am this morning on the TV but at 1:20pm on your website! Hope the point gets across. News is happning 24/7, you need to dedicate & depute resources accordingly to cover them. Unlike Newspapers which close certain days through the year (sic) as though news stops happening, hope news bureaus running website versions will get this point & ensure timely coverage.

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  • AntiKingClass
    Mar 21, 2012 - 1:46PM

    @ Ahmer Ali: Wake up please..Pakistan can no more afford this kind of ‘Jiala-ism’..Recommend

  • Pakistani
    Mar 21, 2012 - 2:13PM

    This is great WB!!! I think it will help to increase the productivity of crops in Pakistan.Recommend

  • antanu.g
    Mar 21, 2012 - 3:21PM

    world bank or IMF is helping many countries….whats wrong if pakistan is getting it. india still is a beneficiary of UKaid for various development programmes….it does not make us beggers.

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  • Chotta Panda
    Mar 21, 2012 - 3:40PM

    This is way of completely putting a country in an eternal bondage and make it dance to the tunes of the lender. How can you fight your banker? The citadel of Islam is becoming more and more a slave.

    See the You Tube video by John Perkins – Confessions of an Economic Hitman:

    http://www.youtube.com/watch?v=aqIHKWd9rSc

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  • Meekal Ahmed
    Mar 21, 2012 - 4:20PM

    @usman786:

    It is wrong to think that our foreign debt is the real problem! It makes up for about 10% of our debt service payments and we are still enjoying the fruits of debt relief.

    It is the domestic debt which is short-term and expensive that is the real worry — although you can say it is low risk since the government is not likely to default on it.

    But the government does have problems rolling over the short term component of the domestic debt and has to borrow instead from the State Bank as they are doing now. That is inflationary.

    This seems like a very good project. I hope it can be implemented on time and on cost.

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  • Meekal Ahmed
    Mar 21, 2012 - 4:22PM

    @Pakistan politics:

    Yes, they have a fairly big office located in Pakistan and both they and HQ in Washington will monitor this project very closely.

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  • Bilal
    Mar 21, 2012 - 4:26PM

    More money for MNAs to eat!

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  • Raja
    Mar 21, 2012 - 4:52PM

    Nato find a way to transit there goods to Afghanistan. This friday parliament assembly will give the vote to allow to nato trucks to transport their good in exchange of billion $’s approval.

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  • someone
    Mar 21, 2012 - 5:10PM

    wahre wah…that is a jackpot for you guys !!! :)

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  • Usaf
    Mar 21, 2012 - 7:02PM

    what are they talking about …there is not a single Goverment agency in the whole Cuntry which would install a sprinkler irrigation system.you can Google it or Bing it or even ask the local Imam…there is no one helping the Farmer ….

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  • fahad
    Mar 22, 2012 - 12:22AM

    looks like Iran Pakistan gas pipeline project is history now. this is what this whole deal is about. i swear the World Bank and IMF said no more loans for Pakistan last year? so what happened? The American magic stick does the trick again.

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  • Balochi liberal
    Mar 22, 2012 - 3:21AM

    So 1 bilion $ goes to our army and ISI through back channels ( infact through all channels) and 0.1 b $ for actual project ?? Good progress.

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  • moeed
    Mar 22, 2012 - 4:25AM

    so i think my electricity and fuel will be getting more expensive to pay off this loan

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  • nadeem ali tahir
    Apr 19, 2012 - 12:37PM

    There should be a project of water management program for Agricultural Engineer.

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