Latest Business News > WASHINGTON – The World Bank said on Tuesday it would fund two projects totaling $1.09 billion, in energy and irrigation, aimed at supporting Pakistan’s growth agenda for reducing poverty.
The World Bank’s executive board approved the projects on Tuesday, the development lender said in a statement.
The $840 million Tarbela IV Extension Hydropower Project will add power generation capacity of 1,410 megawatts, contributing a crucial source of electricity for the economic growth and development of Pakistan, the World Bank said.
Only 15 per cent of Pakistan’s vast hydropower potential has been developed, the Bank noted.
The Tarbela IV Extension Hydropower Project will use the existing dam, tunnel, roads and transmission line for generating additional electricity in summer months when demand for electricity and river flows are high, it added.
“The beauty of this project is that it will help Pakistan reduce the gap between supply and demand of electricity by maximizing the benefits of existing infrastructure of Tarbela Dam without requiring any land acquisition or relocation of population,” Rachid Benmessaoud, World Bank country director for Pakistan, said in the statement.
“The direct beneficiaries will be millions of energy users, including industry, households and farmers who would get more electricity at a lower cost and suffer fewer blackouts.”
The $250 million Punjab Irrigated Agriculture Productivity Improvement Program Project is aimed at getting maximum productivity out of irrigation water by weaning farmers away from the traditional and “wasteful” flood irrigation, the Bank said.
The project will emphasize more modern methods like drip and sprinkler irrigation systems, which in turn will encourage crop diversification, it said.
The hydropower project includes a $400 million, 21-year loan from the Bank’s International Bank of Reconstruction and Development that includes a grace period of six years.
The remaining $440 million of the Tarbela project and $250 million for the irrigation project are credits from the International Development Association, the World Bank’s concessionary lending arm.
These 25-year loans have a 1.25 per cent interest rate and a five-year grace period, the Bank said. AFP