ISLAMABAD: The World Bank and the Asian Infrastructure Investment Bank (AIIB) signed on Wednesday loan and grant agreements worth $720 million with the government for the fifth extension project of the Tarbela dam and governance policy programme for Balochistan.

Under the loan agreement, the World Bank will provide a credit of $390m for the fifth extension hydropower project of the Tarbela dam which will facilitate a sustainable expansion of the country’s electricity generation capacity by installation of three additional power generating units having installed capacity of 470 megawatts each on existing Tunnel-5 without affecting the capacity for irrigation release.

With the addition of 1,410MW, the total installed capacity of the Tarbela dam will rise to 6,298MW.

The total cost of the project is $823.5m, with the World Bank financing $390m and the Asian Infrastructure Investment Bank (AIIB) $300m. The remaining $133.5m will be funded by Wapda ($124.5m) and National Transmission and Despatch Company ($9m) for a transmission line from Tarbela to evacuate additional power.

The project will help in further development of hydropower potential along the Indus cascade which is a cornerstone of the World Bank strategy and the government’s energy policy to reduce load-shedding, cost of electricity generation and improve financial sustainability of the power sector.

The project would also continue to support a number of schemes initiated by Wapda for communities of the area under the Tarbela-4 extension project.

A separate grant agreement for the provision of $30m for the governance and policy programme (GPP) for Balochistan ($16m) and Fata ($14m) was also signed. The funds will be released from the second phase of Multi-Donor Trust Fund (MTDF) administered by the World Bank.

The objective of the programme is to strengthen the capacity for collection of sales tax on services and improve accountability in public finance management and service delivery in education and irrigation sectors in Balochistan and Fata.Economic Affairs Division Secretary Tariq Bajwa signed the loan and grant agreements while representatives of Wapda, NTDC, the government of Balochistan and Fata secretariat signed the project agreements on behalf of their respective sides.

World Bank Country Director Patchamuthu Illangovan and AIIB Procurement Adviser Ian Nightingale signed the agreements on behalf of their respective organisations.

Published in Dawn January 19th, 2017