WB to fund $200m water project in Balochistan

EU signs two financing deals worth €59m for the country

ISLAMABAD: The World Bank Wednesday approved a $200 million loan for a water resources management project in Pakistan, raising to $5.5 billion the amount of net additional loans that the PML-N government has obtained from the Washington-based lender over the last three years.

Separately, the European Union also signed two financing agreements worth €59 million for Pakistan.



The $200 million credit has been approved to strengthen Balochistan government’s initiative for a community-based water management project for irrigation purposes, according to a handout issued by the lending agency on Wednesday.

This is second loan the WB has approved for Pakistan in the last seven days. On June 23, it had sanctioned a $1.02 billion package for budget financing and supporting additional borrowings from international capital markets through WB-backed guarantees.

Until June 2013, when the Pakistan Muslim League-Nawaz-led government came into power, the WB had sanctioned loans worth $24.8 billion. These have since risen to $30.3 billion.



Out of the $5.5 billion approved in the past three years, the WB has disbursed $4.2 billion.

Despite the heavy borrowing, the net increase in Pakistan’s debt obligations towards the WB are just $2 billion since the remaining $3.5 billion was used to retire past debts.

The WB said that the Balochistan Integrated Water Resources Management & Development Project would support investments in two of the 18 basins in Balochistan – Nari and Porali river basins. These river basins were selected based on an assessment of surface water resources development opportunities.

Balochistan is the least water-secure province in Pakistan and farmers here face the greatest risks from climate change, said Illango Patchamuthu, the World Bank Country Director for Pakistan.



The WB says small and medium holding farmers, having up to 49.4 acres of land, will benefit from the project. This makes up around 42,800 farm households who stand to benefit from the project. The province’s hydro-meteorological monitoring and river basin information systems will also be strengthened.

EU Aid

Pakistan and EU on Wednesday also signed financing agreements for Balochistan rural development and community empowerment programme and the international labour and environment standards programme.

Tariq Bajwa, Secretary Economic Affairs Division and Stefano Gatto, Chargé d’Affaires of the EU signed the agreements in Islamabad on Wednesday.

The EU and the government of Balochistan jointly designed the six year programme under which the EU will contribute €45 million to support community-led local development and local governance to partner in reducing the negative impact of economic deprivation, poverty, social inequality, environmental degradation and climate change, according to a statement issued by the EU delegation to Pakistan.

The Programme will also assist the Balochistan government in formulating a policy framework to institutionalise and sustain community-led local development approaches, and to improve public finance management in the province.

Both the sides also signed an agreement to strengthen labour standards worth €12.6 million.

Published in The Express Tribune, June 30^th, 2016.