Pakistan, ADB sign $1.54 billion projects to improve energy, transport, other sectors

ISLAMABAD: The Pakistan government and the Asian Development Bank (ADB) on Wednesday signed loans and grant agreements amounting to $1.54 billion to improve energy, transport, irrigation, and urban sectors.

ADB country director Yong Ye and Economic Affairs Division secretary Mian Asad Hayaud Din signed the agreements.

The projects were approved by the ADB board of directors last week. Minister for Economic Affairs Omar Ayub Khan, ADB’s vice president (Operations 1) Shixin Chen and director general Yevgeniy Zhukov of Central and West Asia Department witnessed the signing ceremony.

“The projects signed mark [the] ADB’s strong commitment for Pakistan’s post-pandemic recovery and sustainable development. Pakistan and [the] ADB will continue working together to improve economic management, build resilience, boost competitiveness and private sector development,” said Yong Ye, ADB’s Country Director for Pakistan.

Under the $300 million policy-based loan for energy sector, the ADB is supporting technical, and governance reforms to strengthen Pakistan’s energy sector and its financial sustainability. The financing is part of the second sub-programme of the ADB’s Energy Sector Reforms and Financial Sustainability Programme, which aims at reducing and managing the accumulated cash shortfall across the power supply chain known as the circular debt.

The ADB will provide $235 million loan to upgrade 222km Shikarpur–Rajanpur section of the National Highway (N55) from two lanes to four-lane carriageway. The N55 is part of the Central Asian Regional Economic Cooperation (CAREC) Corridor 5, which links the ports of Karachi and Gwardar in southern Pakistan with the national and international economic centres to the north.

The project will improve operations along the network and enhance capacity of the National Highway Authority.

The $650 million financing will help improve the livability of five cities in Khyber-Pakhtunkhwa by upgrading urban infrastructure and expanding access to reliable services.

The project consists of a $380 million ADB loan and a $5 million grant with a co-financing of $200 million loan by the Asian Infrastructure Investment Bank to improve water supply and sanitation in the cities of Abbottabad, Kohat, Mardan, Mingora, and Peshawar, by enhancing water supply systems and sewerage networks benefitting up to 3.5 million people.

The Minister for Economic Affairs highlighted that under the CAREC Corridor Development Investment Programme tranche-II ($235 million), a 222km Shikarpur-Rajanpur Section of Indus Highway (N-55) will be dualized (four-lane carriageway), which traverse Sindh and Punjab provinces on the western side of the River Indus via Kandhkot, Kashmore and Rojhan.

The dualisation of Indus Highway (N-55) will not only boost local economic activities but also promote intra/interregional trade and movement of people by improved connectivity and reduced travel time.

Indus Highway provides another international corridor linking China, Afghanistan and their neighbouring Central Asian countries to the Arabian Sea. To ensure comfort and safety of road users, the section will be equipped with bus shelters, trauma centres and rest areas, as well as road safety facilities, he added.

Omar Ayub Khan said that the Integrated Social Protection Development Programme will support the government’s efforts to implement Ehsaas Programme, including social protection and poverty reduction schemes in line with the vision of Prime Minister of Pakistan Imran Khan.

Kurram Tangi Integrated Water Resources Development project is one of the top priority projects in the erstwhile Fata, which includes construction of a dam with water storage facility, hydropower generation and construction/upgrading of irrigation system, covering 140,000 hectares. It will not only help increase the agricultural production, create employment opportunities and reduce rural poverty in the region but also improve food security in the country.

The minister reiterated the government’s strong commitment to support all the provinces, AJK and Gilgit-Baltistan for achieving inclusive growth and sustainable development.

Shixin Chen, vice president of ADB, said that despite a challenging situation caused by the Covid-19 pandemic, the government of Pakistan continues to make progress in implementing comprehensive economic, fiscal and structural reforms.

He also commended the efforts of the government of Pakistan for addressing socioeconomic challenges and economic recovery, amid pandemic.

Chen appreciated the mass vaccination programme for controlling the spread of Covid-19 for which the ADB has also provided $500 million to Pakistan.

Eugene Zhukov, director general of ADB, said that the bank will continue to support the government’s development priorities and stands committed to support Pakistan for a green, resilient and sustainable recovery.

Yong Ye said that the ADB’s financial support will strengthen Pakistan’s economy and reduce the risk of external economic shocks.

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