ISLAMABAD: The Asian Development Bank (ADB) on Friday approved a $100 million loan for a highway project in Pakistan that will mark its first co-financing with the Asian Infrastructure Investment Bank (AIIB).
AIIB will provide a $100m loan subject to its board approval later this month.
The Department for International Development (DFID) of the United Kingdom has also committed a $34m grant for the project. ADB as the lead financier will administer both the AIIB loan and the DFID grant.
ADB and AIIB have been preparing projects for co-financing since last year. A memorandum of understanding for collaboration was signed by ADB President Takehiko Nakao and AIIB President Liqun Jin at the time of ADB’s annual meeting in Frankfurt, Germany last month.
The project will fund the remaining 64-kilometre long four-lane section of the M-4 National Motorway connecting Shorkot and Khanewal access-controlled motorway connecting Shorkot and Khanewal, which is the last missing section of the national motorway M-4 to be constructed. The project will facilitate north-south connectivity, improve quality and efficiency of road transport services, and promote inclusive economic growth.
ADB has already provided a project loan of $178m to fund the section of M-4 motorway connecting Gojra to Shorkot.
The project constitutes a key part of a 1,800km Central Asia Regional Economic Cooperation (CAREC) transport corridor linking the port city of Karachi in the south, to major primary production and population centers including Lahore, Faisalabad, Islamabad and Peshawar, and on to Torkham on the northern border with Afghanistan.
“This is a historic milestone for ADB and AIIB as we jointly aim to meet the pressing infrastructure needs in Asia and the Pacific region,” said ADB President Nakao.
“The project has strategic value to Pakistan as it supports north-south connectivity, new trade, and business opportunities, which will boost jobs and cut poverty.”