ADB to invest in CPEC, Gwadar city projects

ADB vice president says CPEC, special economic zones need huge finances that it can complement

ISLAMABAD: The Asian Development Bank (ADB) has expressed keen interest in investing in the China-Pakistan Economic Corridor (CPEC) and in the Gwadar city to complement efforts made by both the countries, but it has not yet received a formal request from the federal government.

“The CPEC, Special Economic Zones and other initiatives have huge financial needs and the ADB can complement Pakistan and China’s efforts,” said ADB Vice President Wencai Zhang while speaking to media at the conclusion of his five-day visit to Pakistan on Monday.



The ADB has provided Pakistan loans amounting to over $27 billion over a period of 50 years and the purpose of the VP’s visit was to find new areas of cooperation and to get first-hand information about economic cooperation.

“I visited Gwadar for the first time and was so impressed by the quality and potential of the Gwadar port, located at such an important place,” said Zhang while sharing his feelings.



“The port needs a lot of investment in coming years. Authorities have named a few projects for transport, city development, water supply and road and rail to link Gwadar with other cities for which they seek the ADB support,” he added.

He said the authorities would first have to talk to the central government for the ADB support and that the bank had so far received no formal request from the government.

However, he added the bank - one of the two largest lenders to the country - would “certainly complement what China and Pakistan are doing along the economic corridor”. “The ADB will not duplicate what the two countries have already agreed to,” he maintained.

Present on the occasion, ADB Country Director Werner Liepach said the bank was actively looking at how to leverage the potential the CPEC offered. “If you only built the road; it’s only for transit, but the CPEC opportunity has to be realised,” he said.



“We are in talks with the government to find ways to develop the economic corridor.”

The ADB vice president said he had also discussed a plan to invest in the Pakistan Railways on a medium to long-term basis. “The railway minister mentioned three main lines but we have not yet picked any line for investment.”

He said the bank was keen to support the railways but first wanted to see a clear roadmap for sector’s reform, one that showed that the sector would be economically and financially viable in the years to come.

“Pakistan has achieved a lot of macroeconomic and financial stability, but the challenge of how to achieve higher economic growth remains,” he said, adding in order to take the current 4-5% growth rate to 7%, Pakistan needed more investment as the investment-to-GDP ratio was still very low.

“Export diversification remains another challenge the country needs to address,” he added.

The ADB distanced itself from the on-going GDP growth fudging allegations levelled by the parliamentarians and independent economists.

“The 4.7% growth estimate for 2015-16 was in line with the projections made by the international financial institutions,” the country director stated.

Zhang said the ADB had invested a lot in the energy sector to support reforms and remove bottlenecks, and it would continue with its heavy investment in the sector.

He said the lender was “overall satisfied with the progress in the energy sector and the government is broadly on track”. The two-year deadline to end load-shedding is realistic but depended on a lot of factors.

The ADB and Pakistan also signed an agreement for a $100 million loan to build the remaining 64km section of the motorway (M-4) connecting Shorkot and Khanewal in Punjab.

Published in The Express Tribune, June 21^st, 2016.

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