WB offers $1.1b for power supply, agriculture

Published: April 13, 2012
Money will also be used to rehabilitate livelihood in strife-torn areas.

Money will also be used to rehabilitate livelihood in strife-torn areas.

ISLAMABAD: Pakistan and World Bank on Thursday signed five pacts for loans of $1.13 billion for improving power supply and agricultural productivity and revitalising community services in strife-torn areas of the country.

Out of $1.13 billion, $35 million will be provided as a grant under the Multi-Donor Trust Fund, administered by WB and established for restoring livelihood and rebuilding infrastructure in the troubled areas.

Economic Affairs Division (EAD) Secretary Dr Waqar Masood and WB Country Director Rachid Benmessaoud signed the agreements.

The bank has given $840 million for extension of Tarbela IV hydropower project that will produce an additional 1,400 megawatts of electricity.

According to EAD, the project will contribute about 4,000 gigawatts of low-cost non-carbon renewable energy annually. Average cost of electricity generated through the project will be 2.49 cents per unit and the project will lay the foundation for a 5th extension of Tarbela.

WB will also provide $250 million for the Punjab Irrigated Agriculture Improvement project. A high-efficiency irrigation system using drips, bubblers and sprinklers will be put in place over an area of about 120,000 acres under the project.

Italy’s soft loan for citizens programme

Pakistan and Italy also signed an agreement for a soft loan of 57.8 million euros for the Citizens Damage Compensation Programme.

The agreement was signed by EAD Secretary Waqar Masood and Italian Ambassador Vincenzo Prati. WB Country Director Rachid Benmessaoud was also present.

The soft loan has been extended at zero interest rate with a repayment period of 40 years including grace period of 31 years. Masood said the assistance would go a long way in alleviating the miseries of flood victims.

Published in The Express Tribune, April 13th, 2012.

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  • Apr 14, 2012 - 9:04PM

    Pakistan should seek investments to develop over 50 trillion cubic feet of shale gas reserves in the country. US natural gas prices have fallen below $2 per million BTU (approx 1000 cubic feet), about one-sixth of the price Pakistan has agreed to pay for Iranian gas. With over 50 trillion cubic feet of known shale gas reserves in Sindh alone, Pakistanis can also enjoy the benefits of cheap and abundant source of energy for decades via the shale gas revolution already sweeping America. Increased production of gas from shale rock in the US has created a huge new supply, pushing down gas prices from $13/BTU (million British thermal units) four years ago to just $2/BTU today, even as the price of oil has more than doubled. By contrast, the Iran pipeline gas formula links the gas price to oil prices. It means that Pakistan will have to pay $12.30/BTU at oil price of $100/barrel, and a whopping $20/BTU for gas if oil returns to its 2008 peak of $150/barrel.



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