‘Green Eurobond’ launched to raise $500m for dams: PM highlights hydropower potential

ISLAMABAD: Prime Minister Imran Khan on Monday said that there is a huge potential of hydropower in the country, and the government would be constructing 10 dams that would help produce 10,000 MW environment-friendly clean energy and conserve water to irrigate 0.1 million acres of land.

Speaking as the chief guest at the launch of “Pakistan's First Green Eurobond” issued by the Water and Power Development Authority (WAPDA) to raise $500 million for the construction of Diamer-Bhasha and Mohmand dams, the prime minister said that the government would now be focusing on long-term projects.

The prime minister said that work progress on the two dams during the last two years was beyond his expectations as unfortunately, there are shortcomings in terms of implementation of the project. He said that even many projects of the present government were facing slow implementation.

This would be the decade of construction of dams, he said adding that as the government would be constructing 10 dams in the next 10 years, which should have been implemented 50 years back.

The prime minister said that Pakistan was a fast growing country of the region in the 1968s and the major factor behind this development was long-term planning by the Planning Commission.

He said the country cannot be moved on the path of development with election-specific, short-term planning.

The country needed long-term planning for the future generation, he said and added that from 1985 onward the country witnessed a decline in development. “The country [Pakistan] which was far ahead in the region is now lagging behind India and Bangladesh,” he said.

He said that all this happened due to short-term planning. The electricity tariffs in Pakistan are the highest in the region primarily because of short-term planning in the power sector, he added.

The government has planned to construct 10 dams over the next 10 years that would produce 10,000MW environment-friendly clean energy and would help the country irrigate 0.1 million acres of land.

He said that Pakistan is most vulnerable in terms of climate change and it would have serious ramifications on water security.

The prime minister said the government has an ambitious target of planting 10 billion trees in the country by 2023.

He said that this would have a positive impact on environment and the government is undertaking long-term planning and would develop 15 parks, and is bringing a core syllabus for the education sector to replace the fragmented syllabus.

The prime minister said that health cards would transform the health system.

“We are now going for wealth creation as it will help the country to repay the loans and the agriculture and industry will also be uplifted,” he said.

Earlier, speaking at the launching ceremony, Finance Minister Shaukat Tarin said that for the first time in the history of this country an entity has executed international capital market a transaction of green bonds.

The green bonds have been becoming popular globally as countries re-orient their policies to join the race to zero emissions.

He said the world issued such bonds worth $170 billion in the first quarter of this year.

The finance minister said the success of this transaction was reflective of the confidence of the international community in the policies of Prime Minister Imran Khan.

He said the Ministry of Finance is also fully committed to contributing to the prime minister’s vision.

He said the two projects – Diamer-Bhasha and Mohmand – are critical to the country’s future energy, water, and food security needs and their timely completion would surely have a significant impact on economic growth and development.

The ministry remained available to contribute to these and other projects of national importance, he said and added that other public sector companies should follow WAPDA as there are several public sector enterprises (PSEs) with strong balance-sheets “such PSEs should go out and raise money for their development,” he said.

APP adds: The bond has been floated for 10 years to raise $500 million at a competitive price of about 7.5 per cent interest rate.

Imran Khan expressed satisfaction over the interest of leading international investors in Pakistan’s green Eurobond, saying it reflected their confidence in the government and Wapda. He lauded Wapda for the fast pace of construction of dams, which he said was vital to produce clean energy for green environment and save the coming generations.

The prime minister said the “decade of dams” project, initiated in 2018 should have been worked up five decades ago to ensure water security.

Finance Minister Shaukat Tarin said completion of Diamer Bhasha and Mohmand dams was critical for meeting the country's water requirements, adding that the launch of bond would help increase the funding for water reservoirs.

Chairman Wapda Lt Gen Muzammil Hussain (retd) said the launch of the debut Green Eurobond by Wapda was a major achievement wherein a para-statal organization accessed the international bond market on its own credentials without any financial obligation on the government.

He said that JP Morgan showed interest in a project of Pakistan after 25 years, and added that the bond enhanced the country's economic profile. Vice Chairman at JP Morgan Mark Stephen Garvin in a video message shown on the occasion congratulated Pakistan on the launch of the bond and lauded Wapda's "unwavering commitment despite challenges".

According to a report by Wapda, the Reg S (Regulation S) 10-year dollar-denominated green bond has been launched at a very competitive price of 7.5 per cent, which is unprecedented given Pakistan’s sovereign bond maturing in 2031 has a coupon of 7.375pc.

"This will go a long way in diversifying the funding sources for undertaking huge capital-intensive projects,” reads the report.

The report states that there was a tremendous appetite for Wapda’s Indus bond with the order book oversubscribed six times reaching close to $3bn. This included credible and top companies, including Goldman Sachs, Blackrock, Bluebay, Fidelity, Ashmore, Amundi and UBS.

“It is a gold-plated transaction and Wapda appointed top [international] banks led by JP Morgan, who have come back to Pakistan after a hiatus. The co-book runners included Deutsche and Standard Chartered with HBL as co-Manager,” the report said.

Copyright Business Recorder, 2021