In a meeting between Finance Minister Ishaq Dar and Mr Raj Shah, Administrator USAID on Friday here it was agreed that, with positive mood on the turnaround in economy and successful launch of Euro bond, it is an opportune moment to explore innovative financing for the Diamir Bhasha Dam.
Dr Raj Shah along with his team, called on the Finance Minister at the ED Office World Bank and discussed program portfolio and future priorities. Finance Minister was assisted by Ambassador Jalil Abbas Jilani, Secretary Finance Dr Waqar Masood Khan, Secretary EAD Ms Nargis Sethi, Acting Governor State Bank Mr Ashraf Mehmood Wathra and Additional Secretary (EF) Mr Shahid Mahmood.
At the outset Dr Shah congratulated Finance Minister on the successful 2nd review of EFF Program and the successful launching of Euro Bonds. Furthermore he appreciated that the efforts of the government bore fruit and Dasu Hydropower Project was going to the World Bank Board on 29th May 2014. He reiterated his commitment to increase the “on budget” portion of USAID disbursement to 35% in the current calendar year. He informed that the three equity funds which had been given $20 each under Pakistan Private Investment Initiative were now in the process of raising matching capital and will soon begin lending funds to the small and medium enterprises. He stated that since the mood of the investors and lenders was very positive towards Pakistan therefore it was an opportune moment to have conference on Diamir Bhasha Dam in which major construction firms may be invited. These firms, in his opinion, would be interested to finance Diamir Bhasha Dam through supply of machinery through EXIM Bank when the project would reach construction phase.
Finance Minister thanked Dr Shah for his positive comments on the turnaround of Pakistan economy. Finance Minister briefly informed him about the macro indicators like Economic Growth, fiscal deficit and debt to GDP ratio, inflation, Current Account Deficit, Exchange rate and stabilization of Rupee, revenue generation and the outstanding performance of Karachi Stock Market all of which were pointing towards resurgence of Pakistan economy. Finance Minister stated that the months of March, April and May were important for Pakistan as during this period World Bank had approved the CASA 1000 project while it was also taking the two Development Policy Credits and Dasu Hydropower Project (DHP) to its board. Moreover during this period Pakistan had second successful review of the EFF and was all set for the 3rd review for the period which ended on 31st March.
Finance Minister said that holding of potential investors’ conference on Diamir Bhasha Dam and approval of the Dasu Hydropower project are aligned with the stated policy of the PML(N) Government. He stated that according to his information US EXIM Bank was offering finances to other countries in the region for a period of 20 years without the requirement of sovereign guarantee while in case of Pakistan the period of financing was 7 years and for that too sovereign guarantee was required. Finance Minister observed that this treatment was denying a level playing field and discouraging investments in Pakistan.
Dr Shah promised to intervene in the matter and also to hold conferences on Diamir Bhasha Dam after the approval of DHP by the World Bank as this would send strong signals about the improved health of Energy Sector in Pakistan.
April 12, 2014