ISLAMABAD, Aug 15: The Asian Development Bank (ADB) has decided to provide $12-15 billion assistance to Pakistan over the next three years to improve infrastructure and utilities, deepen governance reforms and create better investment conditions.

The assistance package will be a combination of direct funding under which the bank will almost double its three-year country assistance programme to $6 billion and arrange another $7-9 billion co-financing from the private sector, Juan Miranda, the director general of ADB’s Central and West Asia Department told Dawn on Wednesday.

This is largest ever funding in Pakistan by any development bank. This does not include allocation for mega water projects like Kalabagh dam or Bhasha dam, for which separate funding would be provided whenever the government takes a decision to construct them. Under the current three-year programme (2005-08), the ADB has provided less than $3.6 billion, including $1.4 billion planned for the current year.

Mr Miranda who is currently in Islamabad as part of preparation of the three year (2008-10) country assistance programme said the bank would provide about $6 billion to Pakistan at the rate of $2 billion per annum. About $1 billion will come through soft-term ADB’s Development Fund (ADB) and remaining $5 billion commercial loans out of Ordinary Capital Resources (OCR).

He said the financing under ADF carried a maximum of one per cent interest and matures in 40 years. He said: “Its size has increased because Pakistan is doing one of the best in Asia in terms of performance based approach of 18 indicators that among other things includes governance”. The OCR was a normal commercial lending for 25 years that carried about six per cent interest, he said, adding that Pakistan was the most open country in Asia and this trend would continue in future.

Mr Miranda said Pakistan’s economic policy and direction at this stage were absolutely right to get Pakistan into the league of fast growing Asian economies and now it required higher level of investments for job creation through second generation reforms for further depth.

He said the development banks including the ADB did not see any risk to Pakistan’s economy even after elections.

Mr Miranda said the ADB would also arrange $7-9 billion through co-financing with commercial banks, private equity groups, capital markets and sponsor groups.