ISLAMABAD, June 15: The International Development Association (IDA) will provide an interest free loan of $1 billion to Pakistan to support the earthquake survivors.

A report of the United Nations while quoting World Bank’s senior country officer for Pakistan Tom Buckley said international donors including the World Bank had pledged $6.5 billion for the quake survivors, out of which up to $1 billion zero interest loans would come from the IDA - a World Bank body.

The bank’s earthquake assistance is part of a four-year $6.5 billion financing package for Pakistan discussed by the bank’s board of executive directors on June 1.

The board has already approved $875 million, he added. He said under the plan people who lost homes and livelihoods would receive “livelihood support” in the form of cash payments and assistance in rebuilding homes that are more earthquake resistant.

The bank is also helping Pakistan pay for imported materials needed for reconstruction, he added.

Praising the government policies, he said successful reform measures, improved credit-worthiness and a strong rate of growth - 8.4 per cent of the Gross Domestic Product in 2004-05 and an expected 6.6 per cent this year - had made the country eligible for increased financing.

He said the package included zero interest loans and funds from the International Bank for Reconstruction and Development which lends money to middle income and credit-worthy nations at favourable rates.

The $6.5 billion will help pay for transportation, water and power infrastructure improvements and increase support for education and health to help Pakistan catch up to other countries of similar income.