The World Bank will provide $406.6 million for the Khyber Pass Economic Corridor (KPEC) project which will promote economic development and uplift areas adjoining the expressway and falling in Khyber Pakhtunkhwa (KP).

An agreement to this effect was signed in Islamabad on Friday, according to a statement by the Economic Affairs Division.

Economic Affairs Division Secretary Dr Syed Pervaiz Abbas signed the project loan agreement on behalf of the government while a representative of National Highway Authority signed the project agreement.

World Bank Country Director for Pakistan Patchamuthu Illangovan signed the agreement on behalf of the World Bank. Minister for Economic Affairs Muhammad Hammad Azhar witnessed the signing ceremony.

The project envisages construction of a 48-km-long, four-lane, 7.3- metre-wide dual carriageway, a high speed access controlled motorway which will run from Peshawar to Torkham.

"It envisages the use of PPP and private financing to develop clusters of economic activity, economic zones and expressways. The connecting transport infrastructure and economic zones will provide a strong foundation for private businesses to invest in these zones," said the statement.

The statement noted that the global integration of South and Central Asia is intertwined with the Khyber Pass and has served as "the key node in trade for hundreds of years".

The expressway between Peshawar and Kabul through the Khyber Pass represents a section of Corridors 5 and 6 of the Central Asia Regional Economic Cooperation (CAREC).

The Economic Affairs Division, in its statement, observed that Corridor 5, which runs through Pakistan, "has the potential to provide the shortest link between the landlocked countries of Afghanistan, Tajikistan, Uzbekistan and the Arabian Sea, while Corridor 6 provides access to Europe, Middle East and Russia".

The KPEC will finance the Peshawar-Torkham expressway portion of Corridor 5.

"The expressway will reduce transit time and costs for regional and international trade transiting the Khyber Pass and extend till Karachi-Lahore-Islamabad-Peshawar Trans-Pakistan Expressway System," said the statement, adding, "It will form as an integral part of the planned Peshawar-Kabul-Dushanbe Motorway."

According to the statement, the resultant improvement in regional connectivity through the corridor "will not only facilitate the commercial traffic and expand economic activities between Pakistan and Afghanistan, but also promote private sector development along the corridor".

Consequently, it is expected that 100,000 new jobs will be generated in KP.

Speaking on the occasion, Azhar said that the signing of this important project "indicates the resolve of the World Bank to support the development agenda of the present government".

Illangovan, while appreciating the reform initiatives of the current government, said that the World Bank is "committed to extend all possible facilitation and financial support to the government in its efforts to promote economic activities in the country and to put the economy back on track".