World Bank to Finance USD 14 bln in Pakistani Dam

The Finance Minister, Ishaq Dar claimed to convince the World Bank (WB) to finance USD 14 billion in the Pakistani Diamer-Bhasha dam. The Finance Minister in a press statement said that the government was able to convince the World Bank that it was not legally necessary to seek an NOC (no-objection certificate) from a neighbouring country to build a dam, and that Pakistan's first priority was Diamer-Bhasha dam after which it would consider Dasu Dam. Earlier, the WB was reluctant to finance the dam and wanted Pakistan to seek an NOC from India but the condition was not acceptable to Pakistan. However, the WB had offered to provide finance for Dasu Dam to produce cheap hydropower. Moreover, the Asian Development Bank (ADB) has also committed to become the lead finance manager for the project.

Mr. Dar in a press statement said that the ADB was appreciative of the economic reforms initiated by the new government and had "agreed to actively engage with Pakistan" again after the adverse policies of the previous government that resulted in more flows to the ADB than into Pakistan. The Finance Minister further said, "I have taken up the Diamer-Bhasha issue with the ADB and its visiting vice president was very positive and promised to work proactively with Pakistan." According to an official statement by Vice President of ADB, Xiaoyo Zhao said during a meeting with Ishaq Dar, "We have now moved ahead and (are) working to find a way to structure it (dam transaction) and we are already looking at various models in this regard." He further said, "The time has come to begin a new relationship with Pakistan and reverse the present trend of negative inflows," promising to soon release USD 430 million for the income support program.

The ADB vice president appreciated steps taken by the new government for reviving the economy and clearing the circular debt that was crucial for bringing in new investors and financing the energy sector. The Finance Minister, Ishaq Dar said that since one institution alone could not provide so much funding Pakistan had decided to approach all international lenders.