ISLAMABAD, Dec 12: The Asian Development Bank (ADB) on Friday approved a $220 million loan to Pakistan to improve education, health and water sanitation services in Sindh province.

The loan is part of the Sindh Devolved Social Services Programme (DSSP) which aims to increase access to basic social services, particularly for women. In addition, the improved governance, financing and flow of funds would enhance the quality, efficiency, affordability and sustainability of social services.

Covering all the 16 districts, the programme will also promote participation and public accountability, while rationalizing services, setting minimum standards and encouraging public-private partnerships.

The programme is funded by two loans equivalent to $210 million. About $100 million come from ADB’s concessional Asian Development Fund (ADF), with a 24-year term, including a grace period of eight years. Interest is one per cent per year during the grace period and 1.5 per cent per annum afterwards.

The second loan, totalling $110 million, is from ADB’s ordinary capital resources, with a 15-year term, including a grace period of three years. Interest is determined in accordance with ADB’s LIBOR-based lending facility.

The technical assistance is estimated to cost $14.2 million, of which ADB will finance $10 million through ADF and the government will provide $4.2 million. The loan carries a 32-year term, including a grace period of eight years. Interest is one per cent per year during the grace period and 1.5 per cent per annum afterwards.

The programme is complemented by a technical assistance loan project to support sector and programme management and monitoring, capacity building for local governments, and sector policy reforms.

“The DSSP is primarily a governance programme that will build local responsibility and capacity to undertake effective planning to address priority needs in the social sector,” the ADB states in its announcement.

“From an early stage, it will promote community participation and partnership with non-government organizations and establish linkages with other ongoing initiatives — from ADB and others — supporting decentralization,” it added.

The Sindh province has some of the worst social indicators with one of the lowest per capita spending in social sectors. The lack of access to basic social services is considered a major factor behind high poverty rates in Sindh, where half the population lives below the poverty line.

In addition to low income, poor households suffer from low levels of education, lack of safe water, and lack of population welfare services. Two-thirds of women and one-third of people above 10 years of age in Sindh are illiterate.

Half of school-age children are not in school due to poverty and lack of proper schools and instruction. About 10 per cent of infants die before the age of 1, while frequent illnesses, food shortages, and inadequate care cause the death of half of those that survive up to the age of 5.

Since August 2001, the federal government has been carrying out a devolution plan, transferring political, financial, and administrative responsibilities to three levels of local government.

The ADB’s country director in Pakistan, Marshuk Ali Shah said: “The DSSP provides an approach that will offer flexible support to local governments in Sindh to carry out their agenda based on certain terms and conditions to ensure accountability and maximize benefits to the poor.”

The programme will last three years to February 2007. The executing agency for the programme is Sindh’s finance department.