ISLAMABAD: The World Bank’s Board of Directors on Tuesday approved a total of US$ 700 million worth assistance for Pakistan’s two projects.
The assistance is meant for 4500 MW Dasu Hydropower Project ($600 million) and Sindh Water Irrigation Project ($100 million).
Earlier on 1 May, the World Bank had approved $1 billion for budgetary support to Pakistan.
Finance Minister Ishaq Dar said Dasu Hydropower Project is located on main Indus River in district Kohistan, KPK, and the other project will help Sindh government to improve its irrigation system.
For Diamer Bhasha Dam, the Finance Ministry is working with the USAID to organize an international investors’ conference in September this year in Washington DC. He said we will fulfill the promises to make Pakistan self-sufficient in energy and water resources.
The World Bank loans are purely concessionary and cheap in nature with repayment schedule spanning over 25 years including five years’ grace period, with no interest and a nominal administrative charges of 2% per annum.
On receipt of $700 million, an equivalent amount of Pakistan rupees will be reduced from the domestic debt which is much more expensive at 12.5% per annum. The Government of Pakistan will be saving net 10.5% in payment of interest. Resultantly, there will be no net increase in overall public debt. – Agencies
Update on Wednesday:
Prime Minister Nawaz Sharif on Wednesday termed the approval for a loan of US$700 million for Pakistan by the World Bank as a ‘historical achievement.’
Speaking with Finance Minister Ishaq Dar who called on him in his chamber at the National Assembly, he congratulated Dar for this remarkable achievement and said “it shows the confidence of multilateral donors and foreign countries in the economy of Pakistan.”