Karachi: The World Bank has approved to provide a loan of USD 1.09 billion to Pakistan for enhancing supply of electricity from the Tarbela hydropower project and improving irrigation methods for the farming community.
According to Alfalah Securities Limited, out of the total approved amount, USD 840 million would be utilized for capacity extension of the Tarbela hydro power project by 1,410 MW, which would shift the generation of electricity from expensive fuel oil to cheaper hydropower technology. Whereas, the remaining USD 250 million would be utilized to improve the irrigation system on 120,000 acres of land in Punjab and would enable conservation of water from wastage while increasing crop yields.
The extension of Tarbela Hydropower project includes a fixed spread loan of USD 400 million to be disbursed from the International Bank of Reconstruction and Development (IBRD) for a period of 21 years including a grace period of 6 years. While the remaining loan of USD 440 million for Tarbela Project and USD 250 million for Irrigation and Productivity improvement project would be disbursed from the International Development Association (IDA), a concessionary lending arm of the World Bank, for a period of 25 years with a 5 years grace period and carrying an interest rate of 1.25% and 0.75% service charges.