PM Nawaz hails approval of $700 million World Bank loan

World Bank unanimously approves $580 million for the Dasu hydropower project, Dar informs the National Assembly

Prime Minister Nawaz Sharif on Wednesday termed the approval for a loan of $700 million for Pakistan by the World Bank as a ‘historic achievement.’

Speaking with Finance Minister Ishaq Dar, who called on him in his chamber at the National Assembly, the prime minister said that about $600 million will be utilised for the 4500 megawatt (MW) Dasu hydropower project and $100 million for the Sindh Irrigation project.

Finance Minister Ishaq Dar, along with Prime Minister Nawaz Sharif, appeared in the National Assembly (NA) during the budget debate.

Dar, seated next to the prime minister, ignored the opposition's concerns over the budget, and applauded the premier’s visionary policies.

The minister said, “I want to share good news with the nation [today]. [The] WB has approved funding for the construction [of the] Dasu dam, [and] the approval was [unanimous], which shows trust of the international players in [the] visionary leadership of premier Sharif.”

"The WB is supporting the transformational energy initiative in Pakistan, and is focused on assisting Pakistan’s energy sector to recover from its crisis, as well as helping the energy sector move onto a more sustainable path which will support economic growth," Dar added.

Dar also said that during the tenure of the Pakistan Peoples Party (PPP), the US had abstained from this voting process, and no one was ready to invest in Pakistan, adding that “we are now on the way [to] real change and progress.”

He said it was in the prime minister’s vision to work on two projects simultaneously, and that the completion of both projects would ease the country’s energy crisis.

A member of the opposition said provinces other than Punjab have been neglected in the 2014-15 budget, to which Dar said that the people residing in Khyber-Pakthnkhwa (K-P) would benefit the most from this project as the Dasu hydropower project was in K-P.

The prime minister and the finance minister left the house after making a brief appearance. Following Dar’s announcement to the NA, the WB also confirmed the information.

A press release issued by the bank’s media section stated that, “The WB’s board of executive directors approved on Tuesday a financing package from the International Development Association (IDA), the WB Group’s grant and low-interest arm, to help expand hydro-electricity generation in Pakistan through the development of the Dasu Hydropower Stage-I Project (DHP-I). The package consists of an IDA Credit of US588.4 million and an IDA Partial Credit Guarantee (PCG) of US460 million to help mobilize commercial financing for the project.”

The DHP-I cost is estimated at about US4.2 billion, and the financing plan consists of IDA credits, IDA Partial Credit Guarantees and contributions from the Water and Power Development Authority (WAPDA) and the National Transmission and Dispatch Company Limited (NTDC).

This is the first attempt by the WB to finance a large infrastructure project on a sequential basis through a combination of credits and guarantees to mobilise the full financing over the construction period.

The credit is financed from the IDA and will be on standard IDA terms, with a maturity of 25 years, including a grace period of 5 years.

Debate on budget

"The government has allocated sufficient resources in the budget for development projects and the textile sector which cannot be negated just by rhetoric of the opposition members," said PML-N MNA Omar Ayub

Taking part in the budget debate, the ruling party’s member said the government’s cogent policies have helped steer the country out of the economic crisis.

“The economy was in tatters when the PML-N assumed power last year,” he said, adding that the ruling party aims to make Pakistan an economic tiger by bringing foreign investment.

Criticising the Pakistan Tehreek-e-Insaf (PTI), he said the party is struggling to grab the opposition leader’s slot in the NA.

“They (PTI members) have no vision and just rely on assumptions,” he said.

PTI parliamentary leader Shah Mahmood Qureshi asked Omar to focus on the budget debate; otherwise “he would be reciprocated [with] harsh words.”

PPP MNA Aijaz Jakhrani said that inflation and unemployment are on the rise in the country. He also said that agriculture is the backbone of the economy, but the new budget carries no subsidy on agriculture inputs including fertilizers.

Meanwhile, Awami Muslim League (AML) chief Sheikh Rashid Ahmed said that the government had failed to address the electricity crisis. He said that electricity should be provided to consumers at cheap rates in order to check power pilferage.

PML-N member Pervaiz Malik said that there is a need to go for structural reforms in view of the challenges facing the economy. He also said that the government retired circular debt, leading to reduction in load-shedding and added a hundred thousand new tax-payers' list.