ADB to provide loans totalling $435mln to fill infrastructure gap 

ISLAMABAD: Pakistan on Tuesday signed two loan agreements totaling $435 million with the Asian Development Bank (ADB) to fund infrastructure gap and develop modern transportation system in its two provinces. 

Manila-based lender sanctioned $100 million in credit to improve standards in the development and delivery of public-private partnership (PPP) projects and to increase investment in infrastructure and services in Sindh. 

In addition, the Bank agreed to provide a $335 million loan to help develop a bus rapid transport (BRT) system in Peshawar, the capital city of Khyber Pakhtunkhwa.

Xiaohong Yang, country director ADB for Pakistan, Shahid Mahmood, secretary of Economic Affairs Division, Hasan Naqvi, secretary finance for Sindh government and Dawood Khan, secretary of Transport and Mass Transit Department in Khyber Pakhtunkhwa signed the agreements.

Finance Minister Ishaq Dar witnessed the signing ceremonies. UK-owned Department for International Development is cofinancing the Sindh scheme through a $19.23 million and $4.75 million technical assistance to be administered by ADB. 

BRT system was expected to be cofinanced by Agence Française de Développement and the European Investment Bank. The Sindh project’s total cost is estimated at $188.98 million with the provincial government contributing $65 million. It is expected to complete in mid-2022 and will support increased private sector financing in infrastructure investment and public services in the province.  

ADB, in a statement, said the project will help establish a PPP support facility, a not-for-profit company with private sector led management, to manage government support for PPPs in a fiscally responsible manner. The support will be mainly provided to PPPs through viability gap funding for mobilising private sector investments in infrastructure, including social services. The Bank further said the project will help strengthen the Sindh government’s capacity to identify, develop, and implement projects with the private sector participation, bringing innovation, efficiency and overall value-for-money.

“The project will build on ADB’s previous partnership with the government of Sindh to strengthen the PPP framework and will draw from national and international best practices to support the provincial government’s policies for fast-track provision of sustainable infrastructure,” the statement quoted Yang as saying. 

Sindh is Pakistan’s second most populous province and is the most urbanised, with about 52 percent of the people living in cities. The province accounts for 32 percent of the country’s GDP.

The modern integrated Peshawar’s BRT corridor will span 26 kilometres from Chamkani to Hayatabad, mainly at-grade along the GT road with a 6km elevated section in the city-centre and tunnel or trench section at junctions to ensure its full segregation. 

The system will include 32 stations, 1 staging facility, and 2 depots. The entire corridor will be restructured along the new BRT infrastructure, including upgraded mixed traffic lanes, sidewalks, streetlights, and drainage.  ADB, in a separate statement, said the BRT project is expected to generate 4,000 jobs and more than 20 percent of them will be for women.

“The BRT corridor will improve the quality of life of the city’s residents by offering safer, efficient, and affordable public transportation,” the statement cited Yang of ADB as saying. “The modern technology used in the project will also cut emissions, and make commuting easier and safer for women, and attract businesses and investors to the city.”