ADB to provide five loans of $775 million

ISLAMABAD: Pakistan and the Asian Development Bank have signed five loan agreements of $775 million to support recovery and reconstruction efforts in the flood-affected provinces of Sindh, Balochistan and Khyber Pakhtunkhwa as well as to train skilled workforce in Punjab.

The Federal Minister for Economic Affairs, Sardar Ayaz Sadiq, on the occasion said that the resource envelop of $2.67 billion provided by the ADB was an evidence of the confidence international development partners had shown in the current government’s policies and rejected all rumours being spread about a possible default.

According to an official announcement made by the Economic Affairs Division (EAD) on Thursday, these projects will support reconstruction and rehabilitation of irrigation and drainage structures, flood risk and on-farm water management, as well as improving power and transport infrastructure in the flood-affected provinces. The signed agreements also include a project to improve access to quality employment for skilled workers in Punjab.

Dr Kazim Niaz, Secretary EAD, and Asad Aleem, Deputy Country Director, ADB, signed the five financing agreements.

The financing agreements include US$475 million concessional loan Emergency Flood Assistance Project to support recovery and reconstruction efforts in Pakistan following this year’s devastating floods, and to strengthen the country’s disaster and climate resilience. This loan is the most concessional loan ever extended by ADB to the Government of Pakistan at 1% interest rate with a repayment period of 40 years. The $189 million under Second Power Transmission Enhancement Investment Program (Tranche 4) was also inked for post-calamity restoration of power infrastructure, including transmission lines and substations in the geographical regions affected by the recent floods.

Another financing agreement amounting to US$100 million was also signed to upgrade 20 institutions and develop four Centers of Excellence to train 96,000 people (women 29,000) in priority economic sectors of light engineering, textile and garments, food processing, information communications technology, tourism and hospitality, automobile/motor bike assembly, parts and repair, health and construction across Punjab province. Two project readiness financing facilities for preparing Khyber Pakhtunkhwa Water Resources Development Project (US$3.6 million) and Naulong Dam Project (US$5 million) were also signed.

Sardar Ayaz Sadiq, Federal Minister for Economic Affairs, expressed his deep appreciation and thanked the president, senior management and board of directors of the Asian Development Bank for their continued and enhanced financial support towards rehabilitation and reconstruction of flood-affected infrastructure, development of TVET institutional framework as well as development of water resources in the country. The minister for economic affairs stated that the Post Disaster Needs Assessment (PDNA) Report, launched in November this year, estimates requirement of US$16.3 billion for reconstruction efforts. The ADB financing is first in the series of development assistance for flood reconstruction that the federal government would arrange in the coming year. He also congratulated the federal government departments for designing and seeking approval of the flood related projects in a record time of two months. Eugene Zhukov, ADB’s Director General for Central and West Asia Department that includes Pakistan, said ADB has approved and committed financing of US$2.67 billion to Pakistan during 2022. The ADB will continue to support the Government of Pakistan’s development priorities and stands committed to supporting Pakistan for a green, resilient and sustainable recovery.