Tuesday May 21, 2024

ADB shows interest in financing ML-1 project

By Mehtab Haider
February 09, 2023

ISLAMABAD: The Asian Development Bank (ADB) has shown interest in co-financing of Mainline (ML-1) project in the first phase along with China at an estimated cost of $2.7 billion.

Initially, the ADB had shown interest in regional connectivity projects when Pakistan and China launched multi-billion projects under the aegis of China Pakistan Economic Corridor (CPEC) during the previous tenure of PMLN government. At that time, China had committed to fully financing the ML-1 project.

The estimated cost of ML-1 stood at over $10 billion but the government mentioned only the first phase in its detailed document during the donors conference held at Geneva to generate much-needed funding for flood-hit areas in Pakistan.

“Now, ADB has shown its interest to participate in financing of first phase of ML-1 construction at an estimated cost of $2.7 billion,” Syed Zafar Ali Shah, Secretary Planning Ministry, told reporters on Wednesday.

He added that Pakistan had included the ML-1 project among 13 other projects, which were highlighted in recently-held donors conference in Geneva.

The federal secretary said that a total of $10.9 billion were pledged for the construction of flood-hit areas for three-year period during the donors conference. However, efforts are underway to get $1 billion within the ongoing financial year, he said.

The secretary planning ministry said the World Bank had committed to provide $500 million out of $1.5 billion sought by Sindh government for construction of 0.4 million housing units in Sindh. He added that Sindh government would finance $225 million in the project.

Giving a breakup of $4.2 billion loan pledged by the Islamic Development Bank (IsDB), he said that the IDB committed to provide $3.6 billion as commodity financing while $600 million as project financing. He said areas would be explored for the $1 billion funds committed by Saudi Arabia.

The government secured commitments from the World Bank, Asian Development Bank and other creditors for 13 avenues, Shah said and hoped that the disbursement of $1 billion loan would start within the current fiscal year.

He said the government had not yet slashed down the allocation of Public Sector Development Program (PSDP) for the current fiscal year.

He ruled out the possibility of reduction in the PSDP funding by Rs300 billion and said that nothing of this sort was conveyed to him.

He said the Planning Ministry made authorisation of Rs311 billion with local component of Rs258 billion and foreign aid of Rs60 billion. However, Rs207 billion have been utilised so far in the current fiscal year.