ISLAMABAD, Nov 19: Pakistan has signed a memorandum of understanding (MoU) with the Asian Development Bank for agribusiness development and agriculture export from the country, a senior official told Dawn on Tuesday.

The MoU was signed following the detail meetings of a fact finding mission of ADB with the government agencies and private sector, said the official.

According to the official, the government would soon prepared the PC-II on the basis of this MoU for approval as soon as possible so that technical assistance (TA) agreement could be signed in time for consultant recruitment and TA implementation.

The ADB would provide financial assistance of $100 million for the project and final loan would be determined by the consultants based on detailed feasibility study.

The mission recommended to the government that agribusiness was a very broad area and that the proposed project should focus on a specific sub-sector-horticulture or dairy.

The total cost of the TA was estimated at $876,000 equivalent, comprising $452,000 in foreign exchange costs and $424,000 equivalent in local currency costs. The ADB would finance the entire foreign exchange cost and $248,000 equivalent of the local currency costs for a total of $700,000 equivalent and the remaining local cost of $176,000 equivalent would be financed by the government.

The official said the TA would be financed under the ADB’s TA special fund. The government has been informed that although the ADB would finance $700,000 equivalent of the TA cost, only $250,000 was provided as a grant and the balance would be recovered from the ensuring project.

The mission also informed the government that a paper was expected to be circulated to the ADB board with a proposal to do away with cost recovery under the TA special fund.

The TA would commence in June 2003 and be implemented over a period of 6 months, said the official.

The TA would be envisage in two phases. The first phase would involve a detail assessment of agribusiness sector potential and constraints. The second phase would be based on the findings of the first phase, which would involve formulation of a project for agribusiness development to accelerate economic growth and poverty reduction.