By IRNA,
Islamabad : The Asian Development Bank (ADB) and the Government of Pakistan Thursday signed an agreement to invest $650 million in reconstruction of vital infrastructure damaged by last year’s devastating floods, the ADB said.
The financial assistance provided under the Flood Emergency Reconstruction Project (FERP) will go towards rebuilding damaged national and provincial road networks, irrigation systems, and flood protection structures, kick starting economic and livelihood activities.
$600 million of FERP resources comes from Ordinary Capital Resources (OCR) with a 32-year term, an eight year grace period and interest set in accordance with ADB’s LIBOR-based lending facility. Another $50 million equivalent will be tapped from ADB’s concessional Asian Development Fund, which will have a repayment term of 40 years, with a 10 year grace period, and interest charges at 1% per annum. ADB will also provide $4 million grant for capacity building technical assistance to strengthen implementation and oversight of the project.
‘Rebuilding the roads, irrigation and flood protection structures will help resume economic activities and secure livelihood of farmers, and protect all other facilities from future disasters. This investment is designed not just to rebuild what has been damaged but to build it to a better standards ’ said Rune Stroem, ADB’s Country Director for Pakistan.
The FERP will reconstruct 793 km of national highways and bridges and 800 km of provincial road networks to multiple hazards resistant standards. The project will improve 1.5 million hector of agriculture land by restoring and strengthening flood protection embankment, rehabilitating canals and other allied infrastructure.
These investments will re-establish inter-regional connectivity, access to markets, and will boost the reconstruction and livelihood restoration processes in the affected areas.
‘In view of the scale of destruction and corresponding difficulties people have been facing, the rebuilding tasks got to be accomplished as early as possible. We look forward to work closely with the Government of Pakistan and provincial agencies for a speedy and effective implementation of the project ensuring earliest recovery for millions of affected people” added Rune Stroem
In addition, ADB as a part of its overall post-flood support increased the trade finance facility to Pakistan by $500 million, providing extra cover to emergency imports and exports during the reconstruction period, and also contributed $3 million grant to enable National Disaster Management Authority to respond to existing and future emergencies and disasters in an effective manner.
The investment is in-line with the Flood Damage and Needs Assessment’ (DNA) prepared by ADB and World Bank in November 2010 which puts the overall damage from the floods to around $10 billion, half in agriculture. About 10 percent of total cultivable land and over 1.5 million livestock and 10 million poultry perished in the floods. Rebuilding of irrigation and flood protection structures will help bring agriculture and crop production in the affected areas to pre-flood levels. The project is also fully aligned with a Flood Reconstruction Plan recently prepared by the Planning Commission.