Islamic Development Bank (IDB) has indicated that it may consider a $30 million loan for Bhasha dam in 2011, sources in Planning Commission told Business Recorder. They said that IDB has agreed to provide financing for Diamer Bhasha dam and will hold meetings with the government by the end of the current month to negotiate the modalities of the deal.
A German company, in its detailed engineering design, raised the projected cost of Diamer Bhasha dam from $6.5 billion to $8.5 billion. Sources said that in the forthcoming meeting of Friends of Pakistan, IDB could announce the financing for both Diamer Bhasha dam and Neelum Jehlum hydropower project, whose costs have also been revised upward to Rs 128.4 billion with foreign exchange component of Rs 46.5 billion. The government is considering presenting only 40-50 big projects before Friends of Pakistan.
Sources said that China has already assured Pakistan that a company would be hired by the Chinese authorities to commence construction. Government had allocated Rs 200 million in Public Sector Development Programme (PSDP) in 2008-09 budget for Bhasha dam.Bhasha dam would generate 4500 mw electricity while Neelum Jhleum project is targeted to generate 969 mw. Sources said that the government is also currently negotiating with Asian Development Bank (ADB) to seek additional support for these two power projects.
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