WASHINGTON: The World Bank unanimously approved on Tuesday the Dasu hydro electric power project and in a pleasant surprise for Pakistan the United States also voted in favour.
The US administration had earlier warned Pakistan that due to congressional constraint, they would prefer to abstain, although they support the plan.
On Monday, Finance Minister Ishaq Dar telephoned US Treasury Secretary Jack Lew and requested him to vote for Dasu, arguing that the support would not only help Pakistan complete this project but would also strengthen the government’s efforts to deal with the country’s agonising energy crisis.
The Pakistan Embassy in Washington also played a key role in winning over the US endorsement, lobbying Congress, the White House and the State Department.
Earlier, all 25 members of the World Bank’s executive board met in Washington to consider Pakistan’s request for financial support for the project. Sri Mulyani Indrawati, the managing director and the chief operating officer, chaired the meeting. Sri Indrawati is former finance minister of Indonesia.
Dasu hydro electric power or Dasu Dam is a critical project to meet the energy needs of Pakistan with a potential to generate 4200 MWs of cheap electricity. Upon completion, it will substantially increase the generation capacity of the country, reduce subsidies, change the fuel mix and bring down the cost of electricity generation.
“Today’s decision by the World Bank to support the project is a reflection of the international financial institutions’ confidence on Pakistan’s economic revival and its clear vision to overcome the energy requirements of the country,” said Pakistan’s Ambassador Jalil Abbas Jilani. “It will also open the sector of hydel-power generation to the private participation.
Progress on this critical project for Pakistan will help forge the Pakistan-US partnership on a lasting basis and further strengthen the bilateral relations.”
The Dasu project is already appraised and the donors had earlier assured Pakistan that if it sends out the approval letter, the International Development Association, a World Bank funding agency, would give credit of $700 million for resettlement, and other preparatory works needed.
The grace period of this credit would be 10 years. Debt servicing would start 5 years after generation from Dasu. On Dasu, first unit would be produced in 5 years.
Published in Dawn, June 11th, 2014