AIIB considering US$1 bn for critical infrastructure projects in Pakistan

on 07/03/2019

The Asian Infrastructure Investment Bank (AIIB) is contemplating provide Pakistan with US$1 billion for investment in critical infrastructure projects in the transport, urban and rural water and energy sectors, says Head of Communications Laurel Ostfield while launching the first bank report in the country..
The bank, he revealed had approved US$400 million for two projects. More than $1 billion investment in critical infrastructure projects in the transport, urban and rural water and energy sectors in Pakistan is under consideration. This support is aimed for four proposed projects.
The Board of Directors of the bank has already approved $ 100 million for the National Motorway M-4 Project and $300 million for Tarbela 5 Hydropower Extension Project, she said.
In alignment with AIIB’s strategic priorities–sustainable infrastructure, cross-border connectivity and mobilizing private capital to date $ 400 million are approved for Pakistan. “We are working to identify projects with high levels of readiness and that help address the needs associated with ageing water and transmission infrastructure.”
“Our focus will also remain on projects that can be carried out on a sound economic basis and contribute towards Pakistan’s long-term economic development,” she said.
Some of the projects under consideration include $100 million for the Karachi Bus Rapid Transit Project, $ 402 million for the Rawalpindi Ring Road Project, $400 million for the Lahore Water and Wastewater Management Project and $160 million for the Karachi Water and Sewer Services Project, Laurel Ostfield said.
According to the inaugural Asian Infrastructure Finance report, there continues to be significant infrastructure investment opportunities across Asia, including in Pakistan, despite current market uncertainty and short-term challenges. An increase in borrowing costs is expected in the next 12 months due to interest rate pressure and monetary policy announcements by the Pakistani central bank. The report notes that currency volatility could also affect project financing.
As governments grapple with the need for macroeconomic stabilization and sustaining a high level of infrastructure investment to meet growing demands, AIIB is eveloping strategies to help its members respond to short and long-term challenges in infrastructure development.
“Our focus on Pakistan demonstrates that during times of macroeconomic uncertainty, multilateral development banks such as AIIB can help reinforce sound public infrastructure investment,” said Dr Jang Ping Thia, Principal Economist. “Our report argues that MDBs will play a critical role in mobilizing private capital not just through co-financing but also to improve project preparation and to reduce project risks. This is why AIIB will remain a vital infrastructure partner for Pakistan.” He said that beside infrastructure development, Pakistan has one of the highest hydro potential in the world. The agriculture and industrial sector also offer great opportunity for investment. Replying a query regarding the interest rate on the AIIB loans, he replied that it will be around the same as charged by other lenders. He said that the AIIB doesn’t give budgetary support to its member countries.n

UK-funded Karandaaz, JS Bank to finance SMEs

on 19/02/2019

UK-funded company Karandaaz has signed an agreement with JS Bank to jointly make Rs 1 billion available for Small and Medium Enterprise financing.
Increased access to SME financing will create jobs, improve household incomes and boost economic growth at a macro-economic level in Pakistan, the British High Commission said in a statement.
Karandaaz Pakistan, a company funded by the UK’s Department for International Development, and JS Bank, one of Pakistan’s fastest growing banking institutions, signed the risk participation agreement to jointly facilitate SME financing.
The facility has been designed on a 50-50 risk participation basis between the two organisations to improve overall commercial lending for the SME sector in Pakistan.
Joanna Reid, Head of DFID Pakistan, while speaking about the partnership between Karandaaz and JS Bank said: “This is an exciting new step in the UK’s support to Pakistan’s economic growth and improved business investment climate. I’m proud of the agreement signed today as SME financing means more jobs for younger people, a skilled workforce and innovation I businesses. The UK is committed to support Pakistan to reduce poverty and achieve prosperity for all.”
Speaking on the occasion Ali Sarfraz, Chief Executive Karandaaz Pakistan said: “It is critical for broad-based economic and employment growth in Pakistan that the existing credit contraction is reversed and brought in line with comparable international benchmarks of at least 20-30 percent of banking assets directed towards SME financing. It is also crucial for commercial banks to develop viable credit models to lend to this vital agent of the economy. Karandaaz is glad to be partnering with JS Bank, one of Pakistan’s most forward-looking banks, to introduce this financing for SMEs.” n

Neelum Jhelum powerhouse resumes generation

on 19/02/2019

In the wake of contractual inspection, Neelum Jhelum Hydropower Project has resumed power generation today (February 2) on schedule. The project, which was commissioned in April 2018, remained shut down from January 5 onwards for the contractual inspection of the plant during the low flow period of River Neelum.
The inspection of the plant on depressurization of Tailrace showed the civil works and E&M works in good quality of construction and robust equipment. The repair where required was minor and carried out on 3.5 KM underground Tailrace, draft tubes, bonnet gates, the MIVs, and the generating units along with the auxiliary equipment. The spillway and debris channel gates of the Dam structure were also tested under the fully operational level of the reservoir which functioned satisfactorily.
The available flow of River Neelum is around 60 Cumecs which allows operation of one unit utilizing live storage of the reservoir. Thus, the Neelum Jhelum Powerhouse is generating about 242 MW at present. All the four units require 280 Cumecs of water which will be possible by March / April 2019 entailing full generation of 969 MW. The Powerhouse is expected to achieve design energy production of annual 4.6 billion units during 2019-2020 generating revenue of Rs. 50 billion per annum approximately.
It is worth mentioning that the first unit of Neelum Jhelum Hydropower Project was commissioned in April 2018. Its all four units went into operation in a phased manner by August 14, 2018. Prior to its contractual inspection, Neelum Jhelum Hydropower Project injected over 1.8 billion units to the National Grid.n

PEC forms 18 committees

on 07/02/2019

Pakistan Engineering Council has started working and constituted 18 committees for the smooth functioning of the council. The committees include:

  1. Enrolment Committee HQ, 2. Engineering Accreditation &Qualification/Equuivalence Committee EA&QEC/EAB, 3. Selection /Promotion committee, 4. Selection and Promotion Board, 5. Think Tank Sub-Committee on Water, 6.HR committee, 7. Engineering Professional Development committee, 8.Enrolment sub committee’s in all Provinces including Islamabad, 9.Chairman’sTask force committee for Sindh, 10. Act and bylaws committee, 11.Power Sector Reform Committee, 12.Vice Chancellors committee, 13.PEC National Award Committee, 14. IT committee, 15. Engineering Skill Development committee, 16. Bidding Documents Committee, 17. Committee on Issues of DISCOs and 18. Building Committee.n

Pak FDI falls by 77.2 pc

on 07/02/2019

Pakistan’s foreign direct investment (FDI) has fallen by 77.2 percent to $899.5 million during first half of current fiscal year as compared to same period of last year.
The net FDI during same period of the year 2017-18 was recorded at $3,950 million, according to data released by State Bank of Pakistan (PBS).
On year to year basis, the FDI also plunged to $230 million in December 2018 against FDI of $2,740 million in same month of the preceding year. According to details, the net FDI from United States fell from $407.5 million in July-December (2017-18) to negative $196.2 million during same period of current fiscal year.
Similarly from China, the net FDI also fell from $1,107.4 million in the corresponding period of 2017-18 to $754.2 million in the same period of current year. The net FDI from Netherlands increased from $46.9 million to $53.5 million whereas from United Arab Emirates, it increased to $45.7 million from $5.8 million. Likewise, the investment from Turkey also rose to $33.1 million in July-December (2018-19) from $8.8 million in same period of previous year. n