ISLAMABAD - Finance Minister Senator Ishaq Dar has directed the Ministry of Water and Power and WAPDA to formulate a plan to attract international donor agencies and US investors for construction of mega dams in Pakistan particularly Diamer-Bhasha Dam in international investors’ meeting to be held in Washington DC.
Pakistan has a plan to hold international investors conference next month (October) in Washington DC for the financing of much needed $13 billion Diamer-Bhasha dam. Therefore, the Finance Minister on Saturday chaired a meeting to discuss issues related to financing of Diamer Bhasha Dam. Sources informed The Nation that as neither Pakistan could afford the financing of neither the Diamer-Bhasha dam nor a single institution, country or group could finance given its mammoth funding requirements. They added that about 80 per cent of the total financing required - more than $10 billion (Rs1.1 trillion) - has to be raised through external sources and the remaining through domestic arrangements.
Therefore, the government has decided to hold the international investors conference for the financing of the much-needed dam, which, if completed, would overcome the energy and water shortages. The United States Agency for International Development will be arranging an investors conference specifically for the largest Pakistani water project in more than four decades. While a few institutional lenders can arrange a part of the external financing, but the major financing has to be arranged through the international capital market as a specific infrastructure bond in the name of Diamer-Bhasha Dam Company (DBDC) - a special purpose vehicle. Meanwhile, the government has already allocated more than Rs 55 billion this year for acquisition of land, construction and improvement of access roads to Diamer Bhasha Dam.
Chairing the meeting, Finance Minister Ishaq Dar underlined that the government will go ahead with both Dasu and Diamer Projects at the same time and eventually phase out costly thermal power generation, which has resulted in large import bills.
Chairman WAPDA Zafar Mahmood briefed the Finance Minister on a draft Hydel Power Policy which is being prepared and it would include all issues related to attract private sector investment in hydel power generation in Pakistan. The policy will provide for upfront tariff to the international investors. He informed that the policy will also address environmental aspects in addition to technical and financial aspects. He further informed that the draft policy is essential for attracting private sector investment in hydel power generation.
He briefed the finance minister on the work done so far in connection with Diamer Bhasha Dam. The finance minister was informed that during the last twenty four hours, Mangla Dam has absorbed two million acre feet of water from its catchment areas. He said that the Mangla Dam Raising Project has brought immense benefits not only for conservation of water but also to control flooding.
The finance minister observed that Indus River Cascade has an over 90000 megawatts power generation capacity and had there been focus on hydel power generation, the country would not have shortage of energy or water. He directed Chairman WAPDA to expedite formulation of a comprehensive Hydel Power Policy in order to attract private sector investment in this huge potential. He emphasized that hydel led energy mix can provide cheaper electricity to the people of Pakistan. He mentioned that with the construction of three gorges dam, China has placed a check on floods and built a reservoir on which the whole country is benefiting.
Miftah Ismail, Chairman BOI, Dr Waqar Masood, Finance Secretary, Saleem Sethi, Secretary Economic Affairs Division, Rana Assad Amin, Advisor to Finance Ministry and senior officials of the Ministries of Finance and Water and Power also attended the meeting.