February 4, 2006	Saturday	Muharram 5, 1427

Please Visit our Sponsor (Ads open in separate window).

ISLAMABAD, Feb 3: The Asian Development Bank on Friday announced to provide a $10 million loan to Sindh government to meet long-term improvement of Karachi’s infrastructure.

The loan would cover 75 per cent of the project’s total estimated cost of $13.33 million. The loan comes from ADB’s concessional Asian Development Fund and carries a 32-year term, including a grace period of eight years. Interest is to be charged at an annual rate of one per cent during the grace period and then at 1.5 per cent.

The Sindh government would contribute an equivalent of $3.33 million in local currency. The executing agency for the project is the Sindh Finance Department and the plan is due for completion in January 2010.

The loan would help address long-term and holistic development needs of Karachi, contributing to a sustainable improvement in the quality of life of its residents, an ADB announcement said.

Karachi, with a population of more than 12 million people, accounts for 95 per cent of the country’s foreign trade and contributes 30 per cent to Pakistan’s industrial production.

The ADB said despite significant expansion in the city’s economy and population, few investments had been made in the city’s urban infrastructure over the past two decades, resulting in haphazard development, a polluted urban environment, and, for many, a poor quality of life.

“Infrastructure and services that are inadequate and unreliable are adding to business and household costs, harming Karachi’s urban and natural environments, and decreasing the city’s global competitiveness compared with alternative Asian mega cities,” says Gulfer Cezayirli, ADB’s senior urban development specialist.

The loan will provide resources for the City District Government of Karachi, the town municipal administrations, and utilities to improve their city planning, management, and financing, as well as in applying commercial principles in the provision of infrastructure and services.

It will then help prepare projects for expanding and improving the mega city’s infrastructure and services that may be funded by ADB in its lending programme for Karachi over the next four years.

Priority projects to be prepared cover water, sewerage, and drainage; solid waste management; roads and transport; and upgrading of informal settlements.

The project will also establish an innovative financing vehicle for the mega city’s infrastructure and services that will act as a means to channel development funds to the city, a catalyst for reforming the city agencies, and an agent to mobilize funds from nongovernment sources for large-scale capital investment needs.