ISLAMABAD -  Pakistan has signed loan agreements worth of $720 million with the World Bank (WB) and Asian Infrastructure Investment Bank (AIIB) to support projects in hydropower, governance and policy sectors.

The projects signed including Tarbela-5th Extension Hydro Power Project (1410 MW) The objective of the project is to facilitate a sustainable expansion of the country’s electricity generation capacity by installation of three additional power generating units having installed capacity of 470MW each (total 1,410MW) on existing Tunnel-5 without affecting the capacity for irrigation release. The total installed capacity of Tarbela Dam after completion of 5th Extension will rise to 6,298MW.

The total cost of the project is $823.5 million. The World Bank will finance $390.0 million and AIIB will contribute $300 million and the remaining $133.5 million will be funded by funded by WAPDA ($124.5 million) and National Transmission and Dispatch Company (NTDC) ($9 million) for additional transmission line from Tarbela to evacuate additional power.

The project would help in further development of the country’s hydropower potential along the Indus River Cascade which is a cornerstone of the World Bank strategy and government’s energy policy to reduce load-shedding, reduce cost of electricity production, and improve financial sustainability of the power sector. Tarbela-5th Extension Hydro Power Project would continue to support a number of community schemes initiated by WAPDA for communities of the area under Tarbela-4 Extension.

Meanwhile, The Governance and Policy Programmes for Balochistan and FATA will be funded through grants of $16 million and $14 million respectively under MDTF-II with the objects to strengthen the capacity for sales tax on services collection, and improve accountability in public financial management and public service delivery in the education and irrigation sectors in Balochistan, increase transparency and effectiveness in public resource management and strengthen accountability of Public Service Delivery in the Agriculture sector of FATA. The projects aim to strengthen upstream (planning & financial) and downstream (service delivery) government systems.

Economic Affairs Division Secretary Tariq Bajwa signed the Loans and Grants Agreements on behalf of the Government of Pakistan while representatives of WAPDA, NTDC, Balochistan governments and FATA Secretariat signed the project agreements. World Bank Country Director Patchamuthu Illangovan and AIIB Procurement Adviser Ian nightingale signed the agreements on behalf of their banks.

Finance Minister Ishaq Dar witnessed the signing ceremony of agreements. On the occasion, the minister thanked the World Bank and Asian Infrastructure Investment Bank (AIIB) for extending their continuous support to the present government in its efforts to achieve the sustainable economic development of the country. Dar said that the present government is focused on economic growth and is making huge investments in energy, infrastructure and social protection. He said that the results of measures taken by the government are already visible. He said that due to these efforts, the government has succeeded in overcoming the energy shortage to a large extent resultantly the load shedding duration has been curtailed for the domestic consumers while uninterrupted supply is being provided to the industries.

The minister also said that keeping in view the future demands on account of greater economic activity, the government is enhancing the production capacity of electricity to cater for the future needs as well.