ISLAMABAD, Feb 2: The World Bank and the Asian Development Bank (ADB) have agreed to finance the construction of $6.5 billion Diamer-Bhasha dam and increase overall funding to Pakistan to about $4 billion.
Prime Minister Shaukat Aziz told Dawn on Friday that he had meetings with presidents of the two institutions during his recent visit to Davos and both agreed to fund the mega dam.
He said the ADB had agreed to enhance its annual funding to Pakistan to about $2 billion and the World Bank would also be catching up.
The ADB’s annual financing to Pakistan currently stands at $1.45 billion as part of three-year country assistance strategy while the World Bank provides about $1.25 billion per annum. As such, the total annual funding from the two institutions currently stands at about $2.7 billion.
The government has estimated a total foreign exchange requirement of $17 billion for big dams. This includes $2.964 billion for Bhasha dam alone.
The prime minister said the overall needs would be spread over many years.
The government had decided to develop big hydel projects in the public sector if the private sector investment was not available because of long gestation period, he said after presiding over the first meeting of the cabinet committee on energy (CCE) earlier in the day.He said Bunji power project alone had the capacity to produce 5000MW electricity.
He said he had also issued instructions for restoration of the 1995 hydel power policy to encourage investment in this sector. He, however, said the construction of small hydel projects would not solve the energy problem on long-term basis and hence big projects would have to be taken in hand.
Mr Aziz said he had expanded the composition of the CCE. The chairmen of the National Electric Power Regulatory Authority (Nepra) and Oil and Gas Regulatory Auhtority (Ogra) and heads of Sui Southern and Sui Northern gas companies had now been added to the committee, he added.
He said he had directed the relevant ministries and the utilities to refine and update demand assessment technologies and prepare accordingly for supply arrangements. He said it was not prudent to add power generation plants much earlier than actual demand and keep on paying for just 12 or 15 per cent capacity utilisation while delayed capacity addition could choke economic growth. Therefore, he said, the relevant ministries should prepare a comprehensive policy keeping a balance between actual requirement and timely capacity availability.
He said he was excited by the plans presented to him about the upcoming projects to overcome power shortage in the longer run while temporary arrangements were being made through rented power plants to meet immediate needs.
The prime minister said the two rented power projects of 150MW capacity each had already been imported. Similarly, he said, the number of time-of-day meters for agriculture tubewells was being increased substantially so that the tubewells could meet their requirements in the night hours.
An official statement quoted Mr Aziz as saying that the government was making all-out efforts to bridge the gap between demand and supply that had emerged as a result of robust economic growth.
The prime minister said the CCE would make focused efforts for energy management and take policy initiatives to meet the demand and encourage investments. It would take holistic approach to energy sector planning to ensure adequate and secure supply of energy, he added.
Wapda presented an update on its hydropower development programme envisaging power generation capacity addition of 10,000MW by 2015. Wapda is also undertaking feasibility studies of hydropower projects, including Dasu, Bunji and Kohala, with a potential of 11,000MW.
The Private Power and Infrastructure Board (PPIB) briefed the CCE regarding the status of thermal and hydel projects in the private sector and said it was expecting thermal power generation capacity addition of 2,000MW by 2008, and a total of 4,500MW by 2009.
The PPIB also expects hydel capacity addition of 4,900MW by 2015. It will be awarding a feasibility study for a 1,000MW power plant based on imported coal shortly.
This would be in addition to ongoing feasibility studies for 550MW of generation capacity based on domestic coal.
