Pakistan has made some headway in its efforts to arrange funds for the multi-billion-dollar Diamer Bhasha Dam as Finance Minister Ishaq Dar announced that the world’s two biggest multilateral lenders have agreed to finance the mega project, which has been facing delays for a decade.
Speaking to the media here on Tuesday, Dar said significant progress had been made in arranging funds for the multi-purpose Diamer Bhasha Dam, estimated to cost over $12 billion.
He said the Asian Development Bank (ADB) had agreed to become lead-manager of the project and the World Bank too came on board lately.
The World Bank (WB) has withdrawn its condition of seeking a no-objection certificate from India for releasing funds for the dam. “We have convinced the WB that it is not legally necessary to seek the NOC from a neighbouring country,” Dar said.
Earlier, the WB had refused to finance the dam on the grounds that it was planned to be constructed in a disputed territory, thus, an NOC was needed from New Delhi.
Pakistan will construct the dam in Gilgit-Baltistan aimed at generating 4,500 megawatts of electricity and storing water for irrigation. Both former military ruler General Pervez Musharraf and former prime minister Yousaf Raza Gilani laid the foundation stone for the dam, but without arranging funds.
ADB Vice President Xiaoyu Zhao also met with Dar here on Tuesday. In the meeting, the minister sought ADB’s assistance for the dam and Zhao promised to work with Pakistan.
Dar said only one institution could not provide over $12 billion, therefore, Pakistan would approach all international lenders. The ADB has agreed to become lead finance manager for the project.
“We have made it clear to the ADB that the country’s first priority is the Diamer Bhasha Dam and after that it will consider constructing the Dasu Dam,” he said.
The previous PPP government had abandoned the Diamer Bhasha project and opted for Dasu Dam, the minister claimed and said Dasu was run-of-river project while the country needed big reservoirs for water storage.
The government has assured the ADB that it will address its concern over the land acquisition policy while speeding up land acquisition for the dam.
Quoting Zhao, a statement issued by the finance ministry stated the ADB was supportive of Diamer Bhasha Dam. “We have now moved ahead and work to find a way to structure it and we are already looking at various models in this regard,” said Zhao.
According to Zhao, the ADB was appreciative of the bold steps taken by the present government for reviving the economy, especially the clearance of circular debt which was essential for attracting new investors and financing in the energy sector.
The ADB vice president said time had come to begin a new relationship with Pakistan and he wanted to reverse the present trend of negative inflows from the ADB.
He assured Dar that the bank would soon release $430 million for the income support programme as it shared Pakistan’s policy to support poor sections of the society. He said the ADB was committed to the Turkmenistan-Afghanistan-Pakistan-India gas pipeline, a project also facing delays.
Dar told Zhao, who was heading a delegation, Pakistan wanted to establish 10 coal-fired power plants in Gadani, Balochistan. The government has already acquired 1,800 acres of land and intends to acquire the remaining 3,200 acres shortly.
A jetty is also being constructed to facilitate import of coal for these plants. Furthermore, the ADB has been requested to fast track release of $900 million for converting 1,200MW power plants into ones based on coal.
Published in The Express Tribune, August 21st, 2013.
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