ISLAMABAD: The government of Pakistan and the Asian Development Bank (ADB) signed on Thursday a letter of exchange for the establishment of Pakistan National Fund for Disaster Management (PNFDM), a program loan for the sustainable energy sector program and two other projects worth of $800million in the energy sector.

The letter of exchange and loan agreements were signed by the Secretary Economic Affairs Division (EAD), Tariq Bajwa and ADB's country director Werner Liepach.

Minister for Finance Ishaq Dar witnessed the signing ceremony. Representatives from Belgium, Norway and Australia were also present at the ceremony.

The PNFDM will be a government-led and owned long-term instrument for disaster management.

The fund will facilitate implementation priorities and objectives set out in the National Disaster Management Plan (NDMP) approved in 2013.

The loan will be utilised for the execution of “Sustainable Energy Sector Reform Program-Subprogram II”, amounting to $400million. It will support the implementation of the objectives laid out within the Pakistan National Power Policy 2013 (PNPP 2013), which aims to develop an efficient and consumer-oriented power system to meet the needs of the people and the economy.

The loan focuses on policy and institutional actions that will restore financial viability to reduce the burden of public financing for the energy sector.

Within this overall strategic focus, the government would ensure a sustainable low-cost generation mix for affordability, a transparent policy and regulatory framework to attract financial investments, protect consumers and strengthen the credit worthiness of companies in the power sector.

Speaking on the occasion, the finance minister expressed gratitude to ADB and other contributing development partners for providing vital support to Pakistan for the cause of disaster management and the energy sector.

He pledged the resolve of the government of Pakistan to mobilise essential resources for efficient utilisation of the disaster fund and to effectively deal with the energy crisis by taking practical measures.

The country director of ADB assured Pakistan of ADB's support and appreciated the efforts of the government for taking practical measures to deal with natural and man-made calamities and address the energy crisis in Pakistan.