ISLAMABAD, May 5: Two major European banks -- Nordic Investment Bank (NIB) and European Investment Bank (EIB) -- have agreed to provide adequate financial assistance to help minimise the growing energy crisis in Pakistan.

Heads of both the banks held separate meetings with Minister for Finance Ishaq Dar in Madrid and showed their keen interest in extending financial assistance to Pakistan, according to a message received here on Monday.

NIB showed its interest in providing financial support in power sector. Mr Dar welcomed NIB’s offer and invited them to finance hydel projects.

To facilitate their investment, a financing framework agreement will be concluded between NIB and Pakistan. EIB, which is a European Union investment institution, also expressed that they are looking forward to the possibilities of financing projects in Pakistan in viable public and private sector projects in infrastructure, industry, agro-industry, mining and services.

They expressed their keenness for partnership with other multilateral development banks especially ADB with focus on electricity generation projects. The finance minister asked EIB to finance hydel projects especially Basha Dam in a consortium with other banks and financial institutions.

He also asked the bank to help Pakistan in energy management -- conservation and efficiency.The minister, who is in Madrid to attend the 41st annual meeting of Asian Development Bank from May 3-6, also attended a meeting of Saarc finance ministers on Sunday and spoke about the current prices shocks being faced by the developing countries in general and the South Asian countries in particular.

He stated that the achievements made so far by developing countries for MDGs may be eroded due to price increase in food and oil and proposed that Saarc should discuss the issue in the next meeting of Saarc finance ministers to find out solutions.

David T. Beers of Standard and Poor’s also met Senator Ishaq Dar and discussed the macroeconomic situation of Pakistan especially imbalances caused by rising food and oil prices.

The finance minister informed him that the government was making all efforts to streamline the economy. “We are focusing on credible database. Our special stress will be on agriculture and manufacturing sectors. Credit will be made available to these sectors with a view not to subsidise but for efficient management of these sectors. We are preparing an energy plan but we need infrastructure support.”

A team of HSBC also met the finance minister and discussed the possibility of HSBC’s participation in the government bond issue and operations of HSBC in Pakistan. State Bank Governor Dr Shamshad Akhtar also joined the meeting.

The finance minister appreciated the keenness of HSBC for the future government issues and their operation in the banking sector in Pakistan. He stated that the government was making a policy review to avoid pressure on foreign exchange reserves.

“We are keen in medium- to long-term gains instead of short term benefits,” the minister said.

Director General Asian Development Bank Juan Miranda and his team also met the finance minister. Miranda confirmed that ADB had already disbursed $300 million and by June 2008 another up to $650 million would be disbursed.

The SBP governor asked the ADB to provide $500 million on fast track basis for strengthening of the State Bank of Pakistan.