GoP signs financing accords on KPEC and HRE-II

By Staff Reporter
Sunday – December 15, 2019
ISLAMABAD: The economic affairs (EA) minister Muhammad Hammad Azhar, witnessed the signing ceremony of financing and project agreement of Khyber Pass Economic Corridor (KPEC) project worth $406.6 million with the World Bank (WB), held on Friday, in EA division.

According to official statements, the project aims to construct 48 kilometres (km) long four-lane, dual carriageway high-speed access controlled motorway, from Peshawar to Torkham.

The project will promote economic development and uplift areas adjoining expressway falling in Khyber Pakhtunkhwa (KP) province. The project envisages the use of public private partnership and private financing to develop clusters of economic activity, economic zones and expressways.

The connecting transport infrastructure and economic zones will provide a strong foundation for private businesses to invest in these zones. The global integration of south and Central Asia is intertwined with the Khyber Pass and has served as the key node in trade for hundreds of years.

The expressway between Peshawar and Kabul through the Khyber Pass represents a section of Corridors five and 6 of the Central Asia Regional Economic Cooperation (CAREC).

Corridor five, which runs through Pakistan, has the potential to provide the shortest link between the landlocked countries of Afghanistan, Tajikistan, Uzbekistan and the Arabian Sea.

Corridor 6 provides access to Europe, Middle-East and Russia. The KPEC will finance Peshawar-Torkham expressway portion of Corridor-five. The Peshawar-Torkham expressway will reduce transit time and costs for regional and international trade transiting the Khyber Pass and extend till Karachi - Lahore - Islamabad - Peshawar Trans-Pakistan expressway system.

It will form as an integral part of the planned Peshawar - Kabul - Dushanbe motorway. The improved regional connectivity through this corridor will not only facilitate the commercial traffic and expand economic activities between Pakistan and Afghanistan but also promote private sector development along the corridor.

It is expected to generate up to 100,000 new jobs in KP. The EA minister highlighted that Friday’s signing of this important project indicates resolve of the WB to support the development agenda of the incumbent government.

The WB country director while appreciating the reform initiatives of the current government, committed to extend possible facilitation and financial support to the government in its efforts to promote economic activities in the country and to put the economy back on track.

EA division secretary Syed Pervaiz Abbas signed the project’s loan agreement on behalf of the Government of Pakistan (GoP) while representative of the national highway authority (NHA) signed the project agreement.

WB country director Patchamuthu Illangovan signed the agreements on behalf of the bank.

Azhar thanked the WB for extending its continuous support to the GoP in its efforts to achieve sustainable economic development in the country.

Separately, Azhar witnessed the signing of financing agreement for hydropower renewable energy-II (HRE-II), on Friday, the EA division secretary Abbas and German Development Bank (KfW) country director Wolfgang Moellers signed the agreement.

Under the agreement, KfW will provide grant assistance worth €12.5 million to the government of Gilgit-Baltistan (GB) and Agha Khan Rural Support programme.

The project has two components, the hydropower component that will be implemented by the GB water and power department and the biodiversity component which will be implemented by the Agha Khan Rural Support Programme.

The implementation of HRE-II in GB will contribute to the provision of electricity for the population of Hunza and Nagar through utilisation of its abundant water resources, which will improve living standards and livelihoods of the local population and the region.

The EA minister thanked the German government for the grant assistance which will be helpful in addressing the increasing energy needs of the region while employing environment friendly solutions.

He said that these initiatives are truly commendable as they are geared to impact the lives of the common man. The GoP values this support of the German government to invest in such schemes and looks forward to further strengthening future cooperation.

Moellers while talking on the occasion said that soon the population of GB will have access to the green and sustainable energy, which will contribute towards socio-economic uplift of the masses. This will also help to create more jobs and promote tourism in the area.