IDB releases fund for Neelum-Jhelum project

ISLAMABAD: The Islamic Development Bank (IDB) and Pakistan on Friday resolved the lingering controversy over halt in funding of $430 million for 969MW Neelum-Jhelum hydropower project so now the IDB and Saudi Fund for Development would release their committed flow of funding.
committed flow of funding.
“Both sides have signed minutes of agreement which will pave the way for release of funds from the IDB and co-financers of this project,” a senior official of government confirmed to The News here on Friday. In the aftermath of revision of the cost of the project, the contractor of the project was reluctant to sign performance guarantee but now issues have been resolved amicably.
Minister for Finance Senator Ishaq Dar held a meeting with the delegation of Islamic Development Bank (IDB) and Saudi Fund for Development at the Ministry of Finance to finalise the financing arrangements of the Neelum-Jhelum Hydro Power Project. Federal Minister for Water & Power Khwaja Mohammad Asif and Minister of State for Water & Power Abid Sher Ali were also present in the meeting.
The cost of Neelum-Jhelum project was revised upward from Rs274 billion to Rs412 billion after making changes in design of the project as well as inserting cost of tunnel boring machines. The revised PC-1 will be considered by the Planning Commission in days ahead.
According to statement issued by Finance Ministry, Dar welcomed the delegation and thanked them for taking time out in Ramazan for discussing the financing issues on the funding of the NJHPP project.
It may be mentioned that in the last meeting on the subject, a sub-committee was formed to discuss the issues that still need to be resolved in this project. EAD, Ministry of Water & power and Wapda shared the table to discuss the concerns of the financers on various matters and finally reached the consensus on the outstanding issues.
The finance minister said, “It gives me great pleasure to announce that IDB and the co-financers on the project have agreed to continue funding of the Neelum Jehlum Hydro Power Project. The project will be completed in the tenure of the current government and will prove to be a symbol of pride for the Nation.”
The prime minister had handed over the responsibility of resolving financing and other related issues of the project to the finance minister in the Cabinet Committee on Energy meeting.IDB Energy Specialist Dr Farid Ahmad Khan said that the interest taken by government of Pakistan for early completion of this project is highly appreciated. “We also would like to thank the Ministries of Finance and Water & Power, which have come up with out of box solutions to expedite the work on the project, he said. He also thanked Senator Dar for his keen interest and guidance through which the process bore fruitful results,” he said.
Khwaja Asif thanked the delegation for being helpful and open-minded in resolving the issues related to the project. “The project, soon to be completed, will prove to be a marvel on which the PML-N leadership, IDB and other financers will feel proud of Mr Nasir Al-Kasabi from the Saudi Fund for Development. We support the project and hope that Pakistan will immensely benefit out of the project,” he said.The meeting was participated be Secretary EAD and other senior members of EAD, Finance Division, Ministry of Water & Power, IDB and SFD.