ISLAMABAD-Pakistan on Friday has signed two different loan agreements with World Bank and Germany for different projects.

Pakistan and World Bank signed loan agreement worth $406.6 million for Khyber Pass Economic Corridor (KPEC) Project. Meanwhile, in other development, Pakistan and Germany signed financing agreement for Hydropower and Renewable Energy phase-II.

Economic Affairs Division Secretary Dr. Syed Pervaiz Abbas signed the project’s Loan Agreement worth of $406.6 million on behalf of Government of Pakistan while representative of National Highway Authority (NHA) signed the Project Agreement of the project. Mr. Patchamuthu Illangovan, Country Director signed the agreements on behalf of World Bank.

The project aims to Construct 48Km long 4-Lane, dual carriageway high-speed access controlled motorway, from Peshawar to Torkham. This project will promote economic development and uplift areas adjoining expressway falling in Khyber Pakhtunkhwa Province. The Project envisages the use of PPP and private financing to develop clusters of economic activity, economic zones and expressways. The connecting transport infrastructure and economic zones will provide a strong foundation for private businesses to invest in these zones.

The global integration of South and Central Asia is intertwined with the Khyber Pass and has served as the key node in trade for hundreds of years. The expressway between Peshawar and Kabul through the Khyber Pass represents a section of Corridors 5 and 6 of the Central Asia Regional Economic Cooperation (CAREC). Corridor 5, which runs through Pakistan, has the potential to provide the shortest link between the landlocked countries of Afghanistan, Tajikistan, Uzbekistan and the Arabian Sea. Corridor 6 provides access to Europe, Middle East and Russia. The KPEC will finance Peshawar-Torkham expressway portion of Corridor-5.

The Peshawar-Torkham expressway will reduce transit time and costs for regional and international trade transiting the Khyber Pass and extend till Karachi - Lahore - Islamabad - Peshawar Trans-Pakistan Expressway System. It will form as an integral part of the planned Peshawar - Kabul - Dushanbe Motorway. The improved regional connectivity through this corridor will not only facilitate the commercial traffic and expand economic activities between Pakistan and Afghanistan but also promote private sector development along the corridor. It is expected to generate up to 100,000 new jobs in Khyber Pakhtunkhwa.

Minister for Economic Affairs highlighted that today's signing of this important project indicates resolve of the World Bank to support the development agenda of the present government.

World Bank Country Director while appreciating the reform initiatives of the current government, committed to extend possible facilitation and financial support to the government in its efforts to promote economic activities in the country and to put the economy back on track.

The Federal Minister for Economic Affairs, Hammad Azhar, thanked World Bank for extending its continuous support to the Government of Pakistan in its efforts to achieve sustainable economic development in the country.

Meanwhile, Federal Minister for Economic Affairs witnessed the signing of Financing Agreement for Hydropower Renewable Energy-II Economic Affairs Division Secretary Dr. Syed Pervaiz Abbas and German Development Bank (KfW) Country Director Mr. Wolfgang Moellers, signed the Agreement.

Under the Agreement, KfW will provide grant assistance worth €12.5 Million to the Government of Gilgit-Baltistan and Agha Khan Rural Support programme. The project has two components i.e the Hydropower component that will be implemented by the Water & Power Department, Government of Gilgit-Baltistan; and, the Biodiversity component which will be implemented by the Agha Khan Rural Support Program.

The implementation of HRE-II in Gilgit-Baltistan will contribute to the provision of electricity for the population of Hunza and Nagar through utilization of its abundant water resources, which will improve living standards and livelihoods of the local population and the region.

Mr. Muhammad Hammad Azhar, Federal Minister for Economic Affairs thanked the German Government for the grant assistance which will be helpful in addressing the increasing energy needs of the region while employing environment friendly solutions. He said that these initiatives are truly commendable as they are geared to impact the lives of the common man. The Government of Pakistan values this support of the German Government to invest in such schemes and looks forward to further strengthening future cooperation.

Mr. Wolfgang Moellers, Country Director, KfW while talking on the occasion said that soon the population of Gilgit-Baltistan will have access to the green and sustainable energy, which will contribute towards socio-economic uplift of the masses. This will also help to create more jobs and promote tourism in the area.