ISLAMABAD: Finance Minister Ishaq Dar has claimed to have convinced the World Bank to finance the $14 billion Diamer-Bhasha dam.

The willingness of a previously reluctant multilateral agency — the World Bank — to be part of a major transaction in Pakistan apparently marked a significant development towards launching of Pakistan’s top priority strategic project to overcome increasing energy and water shortages.

The Asian Development Bank has also committed to become the lead finance manager for the project.

“We have also convinced the World Bank to finance the project,” the minister told journalists here on Tuesday. He said the government was able to convince the World Bank that it was not legally necessary to seek an NOC (no-objection certificate) from a neighbouring country to build a dam and that Pakistan’s first priority was Diamer-Bhasha dam after which it would consider Dasu Dam.

The World Bank has been reluctant to finance Diamer-Bhasha dam and had linked its willingness to an NOC from India — a condition unacceptable to Pakistan. The bank had, however, offered to provide financing for Dasu Dam to produce cheap hydropower.

Responding to a question, Mr Dar said the ADB was appreciative of the economic reforms initiated by the new government and had “agreed to actively engage with Pakistan” again after the adverse policies of the previous government that resulted in more flows to the ADB than into Pakistan.

“I have taken up the Diamer-Bhasha issue with the ADB and its visiting vice president was very positive and promised to work proactively with Pakistan” and become the lead finance manager for the project, he said.

The minister said since one institution alone could not provide so much funding Pakistan had decided to approach all international lenders.

An official statement quoted ADB vice president Xiaoyo Zhao as saying the Manila-based agency was on board and supportive of the construction of Diamer-Bhasha dam. “We have now moved ahead and (are) working to find a way to structure it (dam transaction) and we are already looking at various models in this regard,” said Mr Zhao during a meeting with Mr Dar.

He said the ADB appreciated the bold steps taken by the PML-N government for reviving the economy specially for successfully clearing the circular debt which was crucial for bringing in new investors and financing in the energy sector.

The statement also quoted Mr Zhao as having said that he was gratified to learn that the new government had zero tolerance for corruption and was committed to transparency which would reap rich dividends for Pakistan.

“The time has come to begin a new relationship with Pakistan and reverse the present trend of negative inflows,” the ADB vice president said. He promised to soon release $430 million for the income support programme.

Mr Zhao also said the Asian Bank was committed to Turkmenistan Afghanistan-Pakistan-India pipeline project which will encourage energy connectivity in the region.

Mr Dar informed the ADB vice president that 1,700MW were added to the national grid after clearance of the circular debt.