ISLAMABAD, Sept 27: The Asian Development Bank on Monday approved a $1.96 billion country strategy and programme (CSP) for Pakistan to finance 23 infrastructure and poverty reduction projects in the next two years.

The programme, approved by the ADB's board of directors, would put new emphasis on assisting infrastructure projects with greatest focus on growth and poverty reduction over the next two years (2005 and 2006), but the final lending would depend on Pakistan's performance and resource availability, an ADB announcement said.

The $1.96 billion programme for the next two years, which is updated every year, has exceeded the $1.72 billion CSP for 17 loans approved in 2003 for the period 2003 and 2004.

The programme, the ADB's medium-term development strategy, and finalized in consultation with the government, is updated every year taking into account the continued relevance of the CSP, its implementation, and ADB's operational programme.

"The ADB supports the government's shift in emphasis towards higher sustained growth to ensure that the benefits of structural reforms reach the poor," said Marshuk Ali Shah, Country Director at ADB's Resident Mission in Pakistan.

"The envisaged increase in lending levels is consistent with the continued improvement in Pakistan's debt absorption capacity and new priorities of the government. The increased lending for infrastructure will not in any way detract from ADB's strategic focus on social sectors in Pakistan," he said.

Loans from ADB's ordinary capital resources will be used for infrastructure sector projects and provincial resource management programmes. Social sector projects and those aimed directly at poverty reduction, including rural development, will be financed through ADB's concessional lending instrument, the Asian Development Fund (ADF).

Priority will be on rehabilitating existing infrastructure in irrigation, roads and urban centres, as well as addressing critical gaps in the power sector. The ADB will also promote public-private partnerships for infrastructure development through a combination of loan and risk mitigation products.

The CSP approved in May 2002 is aimed at supporting poverty reduction in Pakistan through a focus on three areas: supporting good governance (devolution, legal, judicial, and police reforms); sustainable pro-poor growth (infrastructure, rural development, and job creation); and social development (education, water supply and sanitation, and social protection).

Among the loan projects planned in 2005 are those to develop renewable energy, rural sector development and drought mitigation and devolved social services in Balochistan, resource management in Punjab, governance in the Federally Administered Tribal Areas, basic urban services in Sindh, and sub-regional transport connectivity.

In the following year (2006), the ADB has planned loans for projects in Punjab to develop irrigated agriculture, resource management and local justice; coastal and inland communities in Sindh; governance in FATA; and national power transmission, social health insurance and mega city projects.

The loans will be supported by a technical assistance programme totalling $10.7 million for 24 projects during 2005-06. This will support ADB's lending assistance, enhance development effectiveness, and assist in capacity building and strengthening institutions.

As of the end of 2003, the ADB had approved a total of 202 loans for Pakistan amounting to $12.45 billion. The bank has also provided support for 271 technical assistance projects totalling $114.8 million.