Pakistan and the Asian Development Bank (ADB) on Wednesday signed two loan agreements of $513 million, which will be utilised for the construction of new Khanki Barrage on the Chenab River and for improving power transmission network in Sindh and Balochistan.
The agreements were signed by ADB’s Country Director Pakistan Werner Liepach, Secretary Economic Affairs Division, Abdul Wajid Rana and Secretary Irrigation Punjab Irfan Elahi.
Country Director ADB Werner Liepach said the financing is provided for two of the most crucial sectors for Pakistan, the irrigation and energy sector. “It is a good day for Pakistan as it is very rare that the bank sign agreements worth half a billion dollars for project financing in a single day”, he added. Liepach said the total disbursement to Pakistan during the last calendar year was around $550 million but added it will increase this year as the bank changed its strategy and now projects ready for execution will be financed. “The agreements signed today will have tangible benefit for the people”, he said.
The soft loan of $ 270 million will be used for replacing the old Khanki headworks built in 1892. The deterioration of the headwork was resulting in water leakages of 447 million cubic meters each year due to the barrage’s shutter gates. Liepach said, the new barrage will reduce water leakages and lessen flood risks in an irrigated agriculture area of 1.2 million hectares. Secretary Irrigation Punjab Irfan Elahi said the loan will be utilised for building a new barrage complex on the Chenab River, 275 meters downstream of existing headworks, including main weir and under sluices, gats and hoisting arrangement and operating deck and an access road bridge. The new barrage will connect the Lower Chenab canal with a new head regulator through a lead channel, ensuring reliable flow of water and increasing flood bearing capacity of the structure. The project is expected to be completed by June 30, 2016. The loan repayment period is 25 years with 1.2 per cent interest rate.
He said, the loan given for Khanki Barrage project is the second tranche of $900 million multi-tranche finance facility of ADB for the Punjab Irrigated Agriculture Investment Programme that has a financing facility of up to $9 billion. He said rehabilitation of three other barrages in Punjab will be carried out in future.
Other loan agreement of $243 million was the third tranche under $800 million Power Transmission Enhancement Investment Programme that includes expanding the grid stations and laying new inter-provincial transmission lines to upgrade the national grid system.
Secretary EAD said the loan will be used for a new 500 kV transmission line of 600 km from Jamshoro Moro Dadu and Rahim Yar Khan, a new 500 kV grid station at Moro and expansion of three existing 500 kV grid stations at Jamshoro, Dadu and Rahim Yar Khan. While a new 220 kV transmission line of 125 km from Uch II power plant to 220 kV grid station at Sibbi and connection between Uch I and Uch II power plants will also be carried out. He said the loan was under ADB’s OCR and will be libor based. The project is expected to be completed by December 31, 2015.
