To secure $14bn investment: SIFC identifies construction of Diamer-Bhasha Dam

ISLAMABAD: The much-hyped Special Investment Facilitation Council (SIFC), jointly run by the military and civilian sides, has identified the construction of Diamer-Bhasha Dam as a potential project to secure over $14 billion investment/transaction through options of soft loans and investments from the Gulf and other countries.

Top officials confided to The News that these options included securing funding through a combination of soft loans and attracting investments. The options of bifurcation of construction of water component are being explored with the help of securing soft loans and making attractive investment prepositions for the power component of Diamer Bhasha Dam.

Conservative estimates for the construction of much-delayed dam will be standing beyond $14 billion at least. Pakistan had made several efforts to secure multibillion-dollar loans through a consortium of multilateral and bilateral donors but all such efforts met with failure. Now something different has to be on the menu of the SIFC in order to make it a success. “Wapda has been assigned to firm up the financial model and purpose investment/transaction options for the development of hydel power at Diamer Bhasha Dam. The Ministry of Power is also mandated to present its proposals on debt and equity for hydro projects to the Apex Committee,” top official sources confirmed to The News here on Thursday.

The SIFC, in its third Executive Committee meeting, has decided that Wapda be given direction to appoint a financial consultant with the mandate to prepare financing options for the construction of much-awaited Diamer Bhasha Dam. The cost of the dam has been escalating with the passage of time and the latest estimates suggest it to stand at more than Rs1,236.1 billion in accordance with the revised approved cost by the Executive Committee of National Economic Council (ECNEC). This revised cost was much lower than the required cost of this Bhasha Dam keeping in view the massive fluctuation in the dollar against the rupee in recent months. The SIFC has directed Wapda to firm up the financial model and purpose investment/transaction options.

The Power Division, along with Wapda, has been assigned to seek financing options on the water component of Diamer Bhasha through loans and then make attractive investment propositions for the power component.

The SIFC has been informed that the technical supplementary grant of Rs200 million was approved and budget uploaded to the SAP system of AGPR.

The SIFC required budgetary allocation of Rs400 million in one or two tranches with the approval of Economic Coordination Committee (ECC) of the Cabinet for the operationalisation of SIFC Secretariat. The ECC had so far approved TSG of Rs200 million for making the SIFC Secretariat operational.

The SIFC-related legislation was approved by the parliament and enacted by president for making it an act of parliament. Now the rules of SIFC and Special Purpose Company are being finalized.

With this arrangement in place, now the institutional mechanism has been devised to establish a single window system for making quantum leaps in different identified sectors. However, the pace of coordination and work on the ground will materialize the desired results in the months ahead.