Prime Minister Nawaz Sharif approved, in principle, the financing plan for construction of Diamer-Bhasha Dam from indigenous resources with directives to the ministry of finance for finalisation of funding modalities. The proposal of the ministry of water and power suggested that dam portion of the project must be financed on self-reliance basis through Public Sector Development Programme (PSDP) allocation as well as sources generated from Water and Power Development Authority (WAPDA).
An official on condition of anonymity stated that there is a possibility of taking finances from a consortium of banks due to quantum of amount involved. He added the government would explore multiple sources of finance for the construction of the dam. It remains unclear whether or not Asian Development Bank (ADB), whose president during his recent visit to Pakistan had stated that his organisation was unable to finance the funding alone, would finance the project. However, details to this effect would be finalised by finance ministry as directed by the Prime Minister. The PSDP allocation would be made from the next fiscal year, he added.
The Prime Minister has asked the secretaries for water and power, planning, and finance to prepare the financial proposal on priority basis, while secretary water and power was also directed to start the preparations so that the physical work on the dam could be started before the end of 2017. It is pertinent to mention here that Diamer-Bhasha Dam was approved for construction by the CCI in 2009.
The efforts to finance it through multilateral donors have been taking a long time and Pakistan needs to enhance its storage capacity urgently to address the threat of becoming a water-scarce country. The storage capacity in existing dams is fast depleting due to silting and the country is losing its agricultural production after every few years due to dry seasons that need to be overcome by constructing more water reservoirs. Diamer-Bhasha Dam will have the capacity to produce 4500MW electricity and will also have water storage capacity of 8,100,000 acre feet.
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