ISLAMABAD, Sept 7: The Asian Development Bank on Thursday agreed to provide about $3 billion to Pakistan’s water and power sectors, including big dams, over the next three to five years under the medium-term country assistance programme.

A broader agreement to this effect was reached here at a meeting between a seven-member delegation of the ADB and senior government officials. The meeting was presided over by Water and Power Minister Liaqat Ali Jatoi.

The ADB delegation, led by Juan Miranda, director-general of the bank’s Central and West Asia Department, also assured to provide technical assistance in upgrading distribution and transmission network because capacity constraints in the two areas were not allowing maximum dispersal of power production.

Most of the ADB funds will be for improvement of power distribution and transmission which is a major cause of current energy crisis in the country.

This will include focus on financial assistance of $500 million for Renewable Energy Development, $1.2 billion for Power Transmission Enhancement, $250 million for Power Distribution Enhancement and $800 million for irrigated Agriculture and Water Resources Projects besides a number of technical assistance programmes for capacity building and relevant studies.

The delegation also committed to assist technically and financially in major rehabilitation and infrastructure projects in the water sector like barrages and dams.

It also agreed to take up with the World Bank to co-finance mega water sector projects and to workout a joint strategy on the subject. For this, the ADB will establish a working group, comprising officials of the federal government and development partners, to work out modalities to finance construction of the Diamer-Bhasha dam project.

The delegation told the meeting that the ADB had an internal system of checks and balance and guidelines for financially supporting such projects.

The minister told the delegation that Pakistan required a lot of investment in water and power sectors to meet requirements of rapid economic growth. He claimed that confidence of domestic and foreign investors had been restored. He said Pakistan was also focusing on alternative energy projects like wind power, solar energy, coal-based generation and hydel and the ADB’s support in the sector would be of great help.

He said the power sector was undergoing reforms and restructuring, which was necessary to achieve growth targets set by the government. He said the power sector not only needed to increase its generation capacity, but improvement was also needed in efficiency and coverage, for which coordinated efforts and support of development partners was a must.