The World Bank (WB) has agreed to provide $840 million for the Tarbela Dam extension project after the Ministry of Water and Power accepted the WB condition to open a separate escrow account to avoid the curse of the circular debt.
According to reports, the WB decision will be a big blow to the oil mafia which is minting billions of rupees on account of thermal generation based on costly furnace oil and diesel. The secretary water and power took the much-awaited decision to open the escrow (revolving) account to obtain the credit line of $840 million for the Tarbela Extension IV Project, which the World Bank had withheld and linked to the opening of the account.
“Yes, we have decided to open the account and the World Bank will soon issue the NOC (No Objection Letter) to this effect. The NTDC will open the account either in the National Bank of Pakistan (NBP) or in Habib Bank Limited (HBL),” a senior official of the Ministry of Water and Power, said.
WAPDA Chairman Syed Raghib Abbas Shah also confirmed that the Ministry of Water and Power secretary had asked the NTDC to open the escrow account so that Pakistan could benefit from the cheaper electricity of 1,350 MWs, which the Tarbela IV extension project would produce.
“This will pave the way for ensuring the World Bank’s credit line of $840 million, which is imperative to complete the most viable project, that is the Tarbela Extension IV project.”
The Tarbela IV project, with a capacity to generate hydropower of 1,350MWs, had earlier hit snags as the NTDC influenced by the mighty oil mafia had refused to open the account.
The World Bank insisted on the account to prevent the viability of the Tarbela-IV project from the adverse impact of the monstrous circular debt, which is feared to touch a staggering Rs 792 billion by the end of the current financial year.
The NTDC would have to deposit all proceeds in the new account for electricity to be supplied to it under the Tarbela-IV project to avert the cash flow crisis. The oil lobby does not want Pakistan to increase its reliance on hydro generation as 68 percent electricity generation is taking place through costly diesel and furnace oil and the oil lobby considers the Tarbela-IV project as detrimental to its interests in the country.
According to the official, under the Tarbela-IV extension project, three turbine units, each having a capacity to generate 450MWs will be installed. The country has right now the capacity to generate hydropower of almost 7,000MWs and in case the project materialises, the hydro generation would increase up to 8,300MWs.
WB allows $840 million for Tarbela extension project
