ADB to provide $1.5-bn loan to Sindh uplift projects

Islamabad: The Asian Development Bank (ADB) will provide $1.5 billion loan to Pakistan for undertaking development projects in different sectors during the current calendar year.

ADB country director Rune Stroem stated this at the signing ceremony of $300 million loan agreement for 'Sindh Cities Improvement Investment Programme' (SCIP).

The governments of Pakistan and Sindh and Asian Development Bank (ADB) signed a deal of $300 million loan, a multi-tranche financing facility (MFF). The agreement was signed by Rune Stroem, ADB's Country Director for Pakistan, and Farrakh Qayyum, Secretary of Economic Affairs Division.

The first tranche of $38 million was also signed here. Over the next 10 years, the multi-tranche financing facility will finance improved basic urban services for nearly 4 million people across about 20 towns in Sindh. Rune said that ADB had approved $1.5 billion loan for Pakistan for current calendar year programme but the disbursement would be performance-based.

He said that ADB disbursed $1.87 billion during last calendar year, 2008, that included $1.3 billion for new projects. 'The investment will help the provincial government of Sindh cope with mounting challenges in providing basic urban services to an estimated 4 million residents of Sindh secondary cities over the next several years,' he said.

'ADB's support to secondary cities will improve the quality of life of urban citizens and help these urban centers unleash their full economic potential. We believe that revitalising Sindh's small and medium-size towns are important to foster balanced urban and rural development,' he added.

The first tranche of $38 million (2009-2012) of ADB's multi-tranche financing facility (MFF) for the Sindh Cities Improvement Investment Program will focus on institutional change and priority infrastructure for the northern Sindh cities of Sukkur, New Sukkur, Rohri, Khairpur, Shikarpur and Larkana. The MFF is ADB's first comprehensive support for Sindh's secondary cities and demonstrates a strategic, long-term commitment to Sindh's urban development, ADB director added.

As Pakistan's second most populous province, Sindh faces rising population growth, a severe deficit of basic urban infrastructure and services, and growing urban poverty. The core challenge that Sindh cities face is inadequate basic urban services delivery in water supply, wastewater and solid waste management. Limited access to and poor quality of water supply, together with poor sanitation, is causing spread of diseases and chronic illness such as diarrhea, especially among children.

'The Program aims at ensuring quality, continuity, reliability and coverage of basic urban services through improved utility management coupled with carefully targeted infrastructure investments, including funding for systems operations and maintenance,' he said.

He noted that an estimated 570,000 households in participating cities would directly benefit from the investment program. The MFF will finance physical investment in water supply, wastewater, and solid waste management infrastructure. A $2.5 million technical assistance grant will support increased efficiency and accountability of the first urban service corporation and the Program will also support Sindh to establish a provincial focal point for championing urban sector management reforms, he added.

Farrakh Qayyum said that the government was working to revisit re-lending policy in consultation with the provinces regarding the interest rates on loans. He said that new re-lending policy would be finalised soon to remove anomalies on the interest rates between centre and provinces. He said that the loan is on behalf of the government of Pakistan and the said project would be run on public-private partnership to ensure the accountability and transparency in the system.

He said that the said project would help improve the services in urban areas and share the development in Sindh prov