ISLAMABAD - The Japanese government has agreed to provide a concessional loan of 2.665 billion yen (approximately $24 million) to the government of Pakistan for Islamabad and Burhan Transmission Line Reinforcement Project.

The notes to this effect were signed and exchanged between Japanese Ambassador Takashi Kurai and Economic Affairs Division Additional Secretary Amin Anjum Assad. Japan’s State Minister for Foreign Affairs Nobuo Kishi and Minister for Water and Power Khawaja Muhammad Asif were also present on the occasion.

Under the arrangement, Japan will provide $24 million for implementation of Islamabad-Burhan Transmission Line Reinforcement Project (Phase-I). Japan Cooperation Agency (JICA) will implement the loan project. The objective of the project is to improve reliability of the national grid and to meet the growing demand for electricity transmission through reinforcement of transmission lines necessary for power supply to the Islamabad capital territory and surrounding areas, thereby contributing to the improvement of economic infrastructure of Pakistan.

The scope of the project includes civil work and equipment for transmission lines of 220 KV between the Tarbela Hydropower Plant and the Burhan sub-station. The government of Japan has provided the loan on very concessional terms and conditions with interest rate of Japanese Yen LIBOR plus 10 bases point (equivalent to 0.12pc) and repayment during 30 years including 10 years grace period. The up-gradation will enable the system to supply more than three times electricity as compared to its existing capacity. The total loan assistance from the Japan government stands at $960 million and grant at $156 million.

In his remarks, Kishi stated that so far the government of Japan has been providing assistance to Pakistan in the power sector through the Energy Sector Reform Programme and the National Transmission Lines and Grid Stations Strengthening Project.

He said, “I sincerely hope that this loan will not only contribute to bridging the current gap of supply and demand for electricity in Pakistan but will also play a vital role in further development of Pakistani economy.” The government of Japan is committed to continue providing necessary assistance for Pakistan’s energy sector in the future as well, he added.

Japan has been extending active support to the energy sector of Pakistan over the last three decades. It includes, as one of the recent examples, 5 billion yen (approximately $43 million) for Energy Sector Reforms Programme that was co-financed by the Asian Development Bank and the World Bank in February 2016. Further, Japan financed the construction of power generation facilities such as the thermal power stations in Bin Qasim and Jamshoro, and the Ghazi Barotha Hydropower Project, and supported the National Transmission and Dispatch Company to expand its grid systems by building grid stations, networking transmission lines and upgrading training facilities.

On the occasion, Asif said, “Pakistan values Japan’s assistance in the field of energy and Japan’s economic cooperation has played imperative role in development of socio-economic sector with main focus on human uplift, poverty reduction and capacity building of our institutions.”

Earlier, addressing a press conference here, Economic Section Counselor Takashi Harada said that the total trade volume between the two countries is $2 billion. Out of the $2 billion trade, Japan export is $1.8 billion while Pakistan export is around $0.20 billion.

Replying a query, he said, “We don’t have any concern with China Pakistan Economic Corridor project (CPEC).” It is a huge project and can unleash the great potential of Pakistan, he added.