ISLAMABAD, Nov 5: All the international lenders, except the Asian Development Bank (ADB), have given their consent for legal transfer of assets and liabilities of Wapda to its corporate entities - Distribution Companies (Discos) , Generation Companies (Gencos) and National Transmission and Dispatch Company (NTDC).

Officials told Dawn on Friday that the International Bank for Reconstruction and Development, the lending arm of the World Bank, the Islamic Development Bank (IDB), the Japan Bank for International Cooperation (JBIC) and the KFW (Kreditanstalt fur Wiederaufbau) of Germany, has supported Pakistan's plans to restructure the power sector and corporatize Wapda.

"They have also conveyed their consent to the government of Pakistan for complete legal transfer of assets and liabilities of the former power wing of Wapda to the newly-corporatized independent Discos, Gencos and NTDC," the officials said and added that formal consent letters would follow in the next few days.

Although supportive of Wapda's reform process, the Asian Development Bank, which is one of the major lenders to a number of Wapda's power sector projects, has raised some technical and legal objections arising out of "negative pledge" clause of the loan agreement.

The officials said the ADB had told the GoP that it would have to make a formal request to the ADB board to waive negative pledge clause which would pave the way for grant of permission to the government to transfer assets and liabilities of Wapda to its corporate entities.

The lenders consent was a major precondition to transfer Wapda's over Rs400 billion worth of assets and over Rs120 billion worth of liabilities or loans to the corporate companies of Wapda so that these companies could be prepared for privatization.

The lenders had been looking at government guarantees so as to ensure repayment of Wapda loans by the corporate entities. To address this aspect, the government has already signed loan liability agreements for 12 companies, including Faisalabad Electric Supply Company and Jamshoro Power Company, which are now at the advanced stage of privatization.

The government has also shared with the lenders loan assumption agreements and subsidiary loan assumption agreements that have been signed between the Wapda and its corporate companies.

The government is required under various covenants with the international lenders to complete the legal transfer of assets and liabilities to the companies and complete the whole process of Wapda's restructuring by December 31, 2004.