The governments of Japan and Pakistan on Thursday signed a loan agreement amounting to Japanese Yen 2.665 billion (equivalent to $ 24 million) for implementation of 'Islamabad-Burhan Transmission Line Reinforcement Project (phase-I).' Ambassador of Japan Takashi Kurai and Anjum Assad Amin, Additional Secretary Economic Affairs Division (EAD), signed the loan documents. Nobuo Kishi, State Minister of Foreign Affairs of Japan, and Khawaja Muhammad Asif, Minister for Water and Power, witnessed the signing ceremony.
The Economic Co-ordination Committee (ECC) on April 28, 2017 approved the loan on the concessionary terms with an interest rate of Japanese Yen Libor plus 10bp, repayable to over a period of 30 years including a grace period of 10 years with general united procurement conditions for the project under Official Development Assistance (ODA) upon the request of Pakistan.
The main objective of the project was to improve reliability of national grid and meet growing demand for electricity transmission through reinforcement of transmission lines necessary for power supply to Islamabad Capital Territory and surrounding areas. The ECC has exempted loan from all levies and taxes in terms of sub-section 53 of the Income Tax Ordinance 2001 section 13 of Sales Tax Act and Section 19 of the Customs Act 1969.
Minister for Water and Power Khawaja Asif, who witnessed the ceremony, stated that Pakistan values Japan's assistance in the field of energy and Japan's economic co-operation has played imperative role in development of socio-economic sector with main focus on human uplift, poverty reduction and capacity building of Pakistani institutions. Energy sector has direct impact on economic growth and prosperity of Pakistan. He said total loan assistance from the government of Japan stands at $ 960 million and grant at $ 156 million.
The scope of the project includes civil work and equipment for transmission lines of 220 KV between the Tarbela Hydropower Plant and the Burhan sub-station. The government of Japan has provided the loan on very concessional terms and conditions with interest rate of Japanese Yen LIBOR plus 10bps (equivalent to 0.12%) and repayment during 30 years including 10 years grace period.
Prior to the signing ceremony, Nobuo Kishi, met Khawaja Muhammad Asif. During the meeting, Asif emphasised that Pakistan looks forward to further economic co-operation with Japan for the benefit of the people of Pakistan in line with the government's priorities and strategy. He explained that Pakistan is fast improving its energy basket and has introduced investor friendly policies to attract huge investment in the energy sector.
The minister for water and power said that Pakistan's effort towards benefiting from renewable resources of energy is highly appreciated at all forums. He said that the new energy mix introduced by the present government is quite rich and has the potential to bring down the prices of electricity in the country. He invited Japanese entrepreneurs to invest in the potential energy sector of Pakistan. The minister applauded the Japan-Pakistan co-operation in various fields. He specially mentioned the Japanese assistance in power sector.