LAHORE, March 11: The Asian Development Bank announced here on Tuesday a Rs26 billion project-free loan with one per cent interest rate for the Punjab.

The loan would be provided under the Punjab Resource Management Programme without any conditionality but the bank would desire meeting of reform targets in education and health sectors, and poverty alleviation and access to justice projects. Major portion of the loan would be spent in the housing sector.

The announcement to this effect was made by ADB Country Director Marshuk Ali Shah during a meeting with Punjab Chief Minister Chaudhry Pervaiz Elahi here.

World Bank Acting Chief Abid Hasan had announced a programme-based easy loan package for development activities in the province during a meeting with Chaudhry Pervaiz Elahi in Lahore on Feb 7. He had said that the loan would be given without any conditionalities.

Sources termed the announcement on Tuesday another major breakthrough and said it would be without any conditionalities which itself was a major development.

They said the Punjab had been facing problems in obtaining loan from the ADP because of its conditionalities and high interest rate.

That was why the province had looked towards the World Bank for loan and this factor could have made the ADP authorities to soften their terms and conditions, the sources said.

They said the loan would soon be handed over to the province which was authorized by the ADB official to spend it at its own discretion.

The completion period for the projects to be identified by the province would be four years but the chief minister desired that these should be finalized in two years, the sources said.

Meanwhile, during the meeting the chief minister said the government had made a three-year agenda of development projects for all cities in the province which would soon be launched with the Rs26 billion loan from the ADB.

He said the Social Development Programme was also being launched in collaboration with international financial institutions in southern Punjab. Major projects in the fields of education and health would also be launched in Lahore, Gujranwala, Rawalpindi, Faisalabad, Multan and Sargodha, he said. The chief minister said the government would initiate the Social Health Insurance Scheme for people which would guarantee them health facilities.

He said 10 dams would be constructed in the rain-fed areas which would generate power and provide sufficient water for crops. Sizable funds would also be allocated for the rehabilitation of roads.