ISLAMABAD: With the provision of $900 million by the Asian Development Bank for Jamshoro supercritical coal-fired power plant to produce 1200MW, Pakistan has stepped into the arena of producing low-cost energy and improving energy mix.

Documents for the $900 million loan were signed and exchanged by Secretary of Economic Affairs Division Nargis Sethi and ADB Country Director Werner Liepach here at the PM secretariat on Wednesday. Finance Minister Ishaq Dar and ADB Vice President Wencai Zhang witnessed the signing ceremony.The project is expected to be completed by December 2018.

The Islamic Development Bank will provide $220 million whereas $380m will be the government’s contribution to meet the overall estimated project cost of $1.5bn.

The government aims to increase the share of coal-based generation from nearly 0.07pc to 15pc in 10 years.

Speaking at a news conference, Finance Minister Ishaq Dar said the government had spent over $2000bn for providing subsidy on electricity over the past two decades, and now cannot afford to borrow money for providing subsidy.

About Bhasha dam, the finance minister said while peer review of the feasibility study carried out by the World Bank and USAID was progressing, the government has decided to acquire land for the project.

The government is pro-active on the project and has told multilateral donors to finance the project. Recently, the World Bank was requested to finance the project together with Dasu hydropower project.

ADB Vice President Wencai Zhang said that the Bhasha dam is very crucial for Pakistan. We are waiting for the results of peer review. However, no single donor or the government can alone finance the $13bn project.

The project has to be financed by the government, multilateral donors and development partners, and ADB will be closely working with the government on the project.

The finance minister said that ADB under its Country Partnership Strategy covering 2014-18 will spend over $3 billion in Pakistan focusing more on energy related projects.