ISLAMABAD: The Water and Power Development Authority (Wapda) is set to raise $500 million international commercial loans through Eurobonds to meet foreign financing needs of Diamer-Bhasha and Mohamand dams.

The Economic Coordina­tion Committee (ECC) of the cabinet, which meets later this week, is expected to formally approve the launch of the Wapda bonds abroad besides taking a decision on the fate of Liquefied Petroleum Gas (LPG) air-mix plants.

This is the first time that Wapda is launching Euro­bonds without a sovereign guarantee of the government owing to positive corporate family ratings (B3 stable by Moody’s) by leading international credit agencies. Wapda needs more than $2bn in foreign funds for the two mega projects but plans to raise such funds in a staggered manner in line with construction needs to avoid unnecessary financing costs.

Wapda has already awarded contracts for Diamer-Basha dam at a cost of Rs442bn Mohamand Dam at a cost of Rs310bn to two separate consortiums of Chinese and Pakistani firms. In the first phase, Wapda has moved a summary through the Ministry of Water Resources to launch $500 million Eurobonds.

Officials said Wapda was expecting the bond to attract almost the same rate as that of Pakistan Sovereign papers in view of equivalent credit rating. The officials said Wapda would use the funds for both projects on a needs basis and would again turn to the international capital market when more funds would be required.

The government had started the construction on Mohmand dam in June 2019 and Diamer-Bhasha dam in May this year. Mohamand dam will have the gross capacity of 1.9 million acre feet (MAF) water and live capacity of 0.67 MAF with power generation potential of 800 megawatts and annual energy production of 2,862 GWh.

The Diamer-Bhasha dam will also enhance life of Tarbela Dam by about 35 years.

Published in Dawn, December 23rd, 2020