ISLAMABAD: The Asian Development Bank (ADB) and the Pakistani government signed an agreement for a $100 million loan for construction of the remaining 64-kilometre Shorkot-Khanewal section of the M4 motorway.
Secretary for Economic Affairs Division Tariq Bajwa and ADB Country Director for Pakistan Werner E. Liepach signed a loan agreement during a ceremony also attended by Finance Minister Ishaq Dar and ADB Vice President Wencai Zhang.
“Pakistan must grasp the opportunities presented by its strategic location. Investments in transport and connectivity under the framework of Central Asia Regional Economic Cooperation (CAREC) programmes, as well as other regional cooperation initiatives, can put Pakistan’s economic development on an upward trajectory,” said ADB Vice President Wencai Zhang.
The project marked ADB’s 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 United Kingdom’s Department for International Development (DFID) has also committed a $34m grant for the project.
ADB will administer both the AIIB loan and the DFID grant.
The ADB through its transport sector projects is assisting Pakistan to upgrade key sections of primary north-south highways and motorways.
This project was part of a 1,800km CAREC transport corridor linking the port city of Karachi in the south, to the country’s inland urban centres and onward to Afghanistan and Central Asia countries.
Once completed, the transport project will help cut travel time between Karachi and Peshawar and link up Pakistan with Central Asia countries boosting regional trade and commerce.
The ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.
Established in 1966, ADB in December 2016 will mark 50 years of development partnership in the region.
It is owned by 67 members, including 48 from the region. In 2015, ADB assistance totalled $27.2 billion, including co-financing of $10.7bn.