The Asian Development Bank (ADB) and the government of Pakistan on Monday signed an agreement for a $100 million loan to build the remaining 64-kilometer section of the motorway (M-4) connecting Shorkot and Khanewal in the Punjab province.
Pakistan’s Secretary for Economic Affairs Tariq Bajwa and ADB Country Director for Pakistan Werner E. Liepach signed the loan agreement during a ceremony attended by Finance Minister Senator Ishaq Dar and ADB Vice President Wencai Zhang, said a press release issued on Monday.
“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 marks ADB’s first cofinancing with the Asian Infrastructure Investment Bank (AIIB). AIIB will provide a $100 million loan subject to its board approval later this month. The United Kingdom’s Department for International Development (DFID) has also committed a $34 million 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 is part of a 1,800 km CAREC transport corridor linking the port city of Karachi in the south, to country’s inland urban centers and onward to Afghanistan and the Central Asia countries.
Once completed, the transport project will help substantially cut travel time between Karachi and Peshawar and link Pakistan with the Central Asian States boosting regional trade and commerce.
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 — 48 from the region. In 2015, ADB assistance totaled $27.2 billion, including cofinancing of $10.7 billion.