ISLAMABAD - Germany will provide 40 million Euro loan to Pakistan for rehabilitation of Warsak Hydropower Plant.

In a ceremony attended by Finance Minister Ishaq Dar and German Deputy Minister for Economic Cooperation Thomas Silberhorn here yesterday, both countries signed three agreements worth 60 million Euro.

Under the first agreement ‘Warsak Dam Rehabilitation Project’, Germany will provide 40 million Euro loan to Pakistan for rehabilitation of 55-year-old hydropower project for restoring its power generation capacity to 243 MW from 180 MW.

The second project ‘Reintegration and Rehabilitation of Temporarily Displaced Persons in Fata” worth 60 million Euro aims to support the return of TDPs to Fata and to contribute to the rehabilitation of the affected areas whereas ‘Regional Infrastructure Fund in Khyber Pakhtunkhwa’ aims to strengthen the implementation capacities of district administration and to enhance participation of the population in the decision-making process at district level..

Earlier, welcoming the German deputy minister, Ishaq Dar acknowledged the increase in German development and economic assistance to Pakistan over the past few years. He reiterated the engagement with Germany in the sectors of energy, health, governance and education. Dar said Pakistan would also like to expand its cooperation with Germany in the spheres of trade, science and technology, automobile industry, manufacturing and renewable energy projects.

The German deputy minister, on this occasion, referred to the upcoming Pak-German bilateral negotiations to be held in Berlin from 28th – 30th October and hoped they would further expand bilateral cooperation. He apprised the minister about the financing agreements between EAD, Pakistan and KFW of Germany on economic cooperation. He said this was an example of Germany’s continued support to Pakistan for development in different sectors.

Minister Dar underlined that all support activities to Fata was spearheaded by the federal government, therefore, all efforts must coincide and supplement instead of duplication or overlapping. He also called upon the German side for revisiting the bilateral agreement between Pakistan and Germany which was signed in 1972. He said as a result of subsequent legislative and economic developments on both sides, relevant changes were required in the agreement which might be discussed during the upcoming bilateral negotiations.

The German minister said that bilateral development cooperation between Pakistan and Germany commenced as early as 1961. Pakistan was the first country to avail economic assistance from Germany in that year, he said. The two sides celebrated the 50th anniversary of development cooperation in 2011. Germany was providing financial assistance through KFW and technical assistance through GIZ.

Mr Silberhorn appreciated Pakistan’s structural reform efforts and achievement of economic stability. He also invited Finance Minister Dar’s attention to the ADB board of governors meeting being held in Frankfurt in May next year and said, “We will be eager to see you participate in the meeting.” Dar said he would attend the ADB meeting.

Both sides on this occasion agreed in principle on establishment of the Pakistan Microfinance Investment Company which is jointly funded by KFW Germany, DFID UK and PPAF (Pakistan Poverty Alleviation Fund) and aims to further strengthen and develop the microfinance sector in Pakistan.

Secretary Finance Dr Waqar Masood Khan, Secretary EAD Saleem Sethi and senior officials of Ministry of Finance and Economic Affairs Division attended the meeting.