ISLAMABAD: Pakistan, the World Bank and the Asian Infrastructure Investment Bank (AIIB) on Wednesday inked loan and grant agreements worth $720 million that will provide vital support to a hydroelectric power project as well as governance and policy programmes for sustainable development in the country.
Economic Affairs Division Secretary Tariq Bajwa signed the agreements on behalf of the government of Pakistan.
Of the $720-million assistance, $690 million will go to the 1,410-megawatt Tarbela 5th Extension Hydroelectric Power Project. The World Bank will provide a credit of $390 million whereas AIIB will give $300 million for the project.
Total cost of the project is estimated at $823.5 million. The remaining $133.5 million will come from two state-owned companies.
The hydroelectric power project will facilitate sustainable expansion of Pakistan’s electricity generation capacity with the installation of three new units of 470MW each on tunnel-5. It will not affect the capacity for water releases for agricultural crops.
After the completion of fifth extension, total installed power production capacity of the Tarbela Dam will rise to 6,298MW.
Pakistan Water and Power Development Authority (Wapda) will contribute $124.5 million whereas the National Transmission and Despatch Company will provide $9 million for an additional transmission line from Tarbela.
The project is believed to help in further development of Pakistan’s hydroelectric power potential along the Indus River cascade, which is a cornerstone of the World Bank’s strategy and Pakistan’s energy policy to reduce outages, cut cost of electricity production and improve financial sustainability of the power sector.
The Tarbela fifth extension will continue to support a number of community schemes initiated by Wapda for local communities under the fourth extension programme.
Out of the assistance of $720 million, the governance and policy programme for Balochistan will receive a grant of $16 million and the same programme for the Federally Administered Tribal Areas (Fata) under the Multi-Donor Trust Fund (MDTF-II) will get another grant of $14 million.
The programmes will strengthen capacity for the collection of sales tax on services and improve accountability in public financial management and public service delivery in the education and irrigation sectors in Balochistan.
They have also been designed to increase transparency and effectiveness in public resource management and strengthen accountability of public service delivery in the agriculture sector of Fata.
The projects will strengthen upstream (planning and financial) and downstream (service delivery) government systems.
Speaking on the occasion, Finance Minister Ishaq Dar said the government was focused on economic growth and was making huge investments in energy, infrastructure and social protection.
Owing to these efforts, he said, the government had succeeded in overcoming the energy shortage to a large extent. As a result, the duration of load-shedding has been curtailed for domestic consumers and electricity was being supplied to industries without any interruption.
The minister emphasised that keeping in view the future demand in the wake of greater economic activity, the government was enhancing the electricity production capacity of the country.
Published in The Express Tribune, January 19th, 2017.