ISLAMABAD: Pakistan and the Asian Development Bank (ADB) on Friday signed two loan agreements worth $375 million in an effort to improve irrigation services and promote public-private partnerships (PPPs) in Punjab – the country’s most populated province that produces 80% of the agricultural output.
Pakistan and the Asian Development Bank (ADB) on Friday signed two loan agreements worth $375 million in an effort to improve irrigation services and promote public-private partnerships (PPPs) in Punjab - the country’s most populated province that produces 80% of the agricultural output.
The loan agreements were inked by ADB Country Director for Pakistan Xiaohong Yang and Economic Affairs Division Secretary Syed Ghazanfar Abbas Jilani.
“The investments will build a new Kharif season irrigation system and further develop PPPs in the province,” said Xiaohong after the signing ceremony.
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“The irrigation project will become part of the Indus basin irrigation system and help increase agricultural production that will directly benefit farming families in the target area. The PPP project will also strengthen capacity of the provincial government to improve key infrastructure and service delivery in the province.”
Under the Jalalpur irrigation project worth $275 million, a surface irrigation system will be developed in Jhelum and Khushab districts of Punjab by drawing water from Jhelum River at Rasul Barrage.
The project will convert over 68,000 hectares of less productive and predominantly rain-fed area into irrigated farmland benefiting 384,000 people.
It took the ADB and the government of Punjab almost six years to plan and make the project effective. The scheme had for the first time been prioritised in the Country Partnership Strategy (2009-13) to improve the irrigation infrastructure.
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Agriculture remains a crucial component of Pakistan’s economy, contributing 20% of the gross domestic product and employing 42% of the labour force in fiscal year 2015, with Punjab contributing more than 80% of the agricultural output.
The Ministry of Planning, Development and Reform has estimated that the agriculture sector has to grow 5% per year to reduce the poverty incidence and ensure food security, and for the national economy to reach its 7-8% annual growth target.
The irrigation system will include an intake structure at Rasul Barrage, a main canal (117 kilometres), distributaries, minor canals, cross-drainage structures, flood carrier channels and associated structures.
The project will improve water-use capacity of 485 water user associations at each watercourse, who will participate in the planning, design, construction, operation and maintenance of watercourses. It will help train water user association members to better manage agriculture and water.
It will introduce modern technologies and best practices like laser land levelling and high-efficiency irrigation systems.
The project will also strengthen capacity of 6,000 farming families in irrigated agricultural practices, water-use skills, profitable farming system and accessing private agriculture support services.
The ADB and Pakistan also signed an agreement for a $100-million loan to support public-private partnership in Punjab by augmenting the provincial government’s viability gap fund to help enhance commercial viability of projects as well as attract and mobilise more private-sector participation in PPPs.
The project will also strengthen the development and delivery of PPP projects across various sectors that will further improve the government’s ability to review, develop and implement sustainable and fiscally responsible PPP projects, hence, delivering better value for money.
The government of the United Kingdom, through the Department for International Development (DFID), is co-financing the PPP project through a $19.6-million grant and $4-million technical assistance, both of which will be administered by the ADB.
The DFID’s grant will also be used to finance a dedicated project development facility to support the engagement of transaction advisers. Total cost of the PPP project is $219.6 million with the Punjab government contributing $100 million.
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