ISLAMABAD: The Asian Infrastructure Investment Bank (AIIB) has approved financing of $235 million for the Lahore Water and Wastewater Management Project. This funding aims to ensure a sustainable supply of safe water and alleviate the environmental damage caused by untreated sewage discharge in the city.

The loan, approved by the Beijing-based institution on Thursday, will also support the Lahore Water and Sanitation Agency (LWASA) in improving its institutional capacity, enabling it to provide better services to the residents of Lahore while becoming a financially sustainable entity.

Lahore faces a dual challenge of inadequate clean water and untreated wastewater overflow, both of which require urgent attention from the provincial government. The AIIB financing will be directed towards addressing these issues in a coordinated manner.

The Punjab government had requested the AIIB’s support for the construction of infrastructure to divert water from the nearby Banbawala Ravi Bedian Depalpur (BRBD) Canal, as well as the establishment of a new surface water treatment plant (SWTP). The project also seeks to reduce non-revenue water (NRW) from its current 45 per cent to below 20pc by replacing old pipes that are responsible for water losses and allowing the infiltration of wastewater, which contributes to the spread of waterborne diseases.

Another key aspect of the project is the installation of water meters. Currently, about 90pc of water connections in Lahore are unmetered, leading to overconsumption and water theft. The financing will enable the installation of bulk meters and the implementation of 100pc metering, billing, and collection systems, aiming for at least a 90pc collection rate.

The project will also invest in enhancing existing water quality monitoring systems and laboratories, as well as providing specialised staff training to ensure the maintenance of the new treatment plants and effective management of water resources. The government has also requested technical assistance to develop a regulatory framework to strengthen public-private partnerships for capital expansion and operational management.

On the wastewater front, Lahore currently lacks a treatment facility. All domestic and industrial wastewater is directly discharged into the River Ravi, resulting in severe pollution. It is estimated that the river receives approximately 640 million gallons per day (MGD) of untreated wastewater, effectively turning it into a sewage drain.

The River Ravi plays a crucial role in replenishing the groundwater supply for Lahore, contributing up to 82pc of the city’s water. However, the contamination of the river has led to polluted water seeping into the groundwater, rendering it unfit for drinking and harming soil fertility.

This contamination has led to an increase in waterborne diseases, including diarrhea, typhoid, hepatitis, and intestinal worms, in several parts of the city. Moreover, since Lahore is located at the upstream end of the River Ravi, the pollution has regional consequences, impacting agriculture and economic activities in the downstream areas.

To address these issues, LWASA has already prepared a blueprint and draft feasibility study for the construction of wastewater treatment plants. The plan includes six treatment plants, with three to be financed by the AIIB, while the remaining three are expected to be funded by other international financial institutions.

Published in Dawn, October 12th, 2025