Pakistan left with no option but to pledge Wapda assets for Bhasha Dam

STAFF REPORT ISB:  Asian Development Bank (ADB), a leading donor for the Bhasha Dam, has informally reversed its commitment to finance the project, giving a big blow to the government of Pakistan, a senior official told the scribe on condition of anonymity.

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According to a Wapda spokesman, funds arrangement has emerged as a major hurdle in the execution of the project and alternative options would soon be considered to raise a massive $12 billion for the dam.

The official revealed that ADB Director General for Central and West Asia Klaus Gerhaeusser had held separate meetings with Federal Water and Power Minister Chaudhry Ahmed Mukhtar and Wapda Chairman Shakil Durrani in June 2012 and the discussed the project financing issue.

“It was evident from the tone of Klaus that there was a change in the ADBs stance and that for now the bank was not ready to support the construction of the dam,” the official disclosed.

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ADB President Harihiku Kuroda early this year also expressed reservations on providing funds for the project until a broader donors coalition which included the World Bank was formed.

The sources said that the proposals would be under consideration to securitise the Wapda assets such as Ghazi Barotha Hydropower project or other vital assets to raise the needed funds.

However, if this proposal is implemented, the cost of hydel electricity would increase manifold, but the nation needs to be ready for this sacrifice for the huge objective to continue building Diamer-Bhahsa Dam.

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The project, located on Indus River in Gilgit-Baltistan (GB) and Khyber-Pakhtunkhwa (KP) province, will store water for agriculture, mitigate floods and provide low-cost hydel electricity. On completion, the project will store 8.1 million acre feet of water and generate 4,500MW electricity, contributing about 19 billion units to the national grid per annum.

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