WASHINGTON: The federal minister for finance Ishaq Dar and the USAID administrator Dr. Rajiv Shah held a meeting in Washington, during which they reached consensus to explore innovative financing for the Diamer Bhasha Dam.
In a statement issued by the Pakistan Embassy, it was said that during the meeting, various options for financing the project were discussed.
The United States opposes major hydro projects due to environmental concerns but appears willing to make an exemption for Pakistan because of its acute energy needs which, if not fulfilled, can de-stabilise the entire region.
The two sides noted 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 would soon begin lending funds to the small and medium enterprises.
They agreed that since the mood of the investors and lenders towards Pakistan was positive; it was an opportune moment to have conferences on Diamer Bhasha Dam in which major construction firms might be invited.
Dr Shah informed the Pakistani delegation that US firms would be interested in financing the dam and might also supply machinery for the project through the US EXIM Bank when it reached the construction phase, the statement said.
The finance minister said that holding of potential investors’ conferences on Diamer Bhasha Dam and approval of the Dasu Hydropower Project were aligned with the stated policy of the PML-N government.
Dar complained that while the US EXIM Bank was offering finances to other countries in the region for a period of 20 years without sovereign guarantee. In case of Pakistan, the period of financing was 7 years and for that a sovereign guarantee was required.
“This treatment was denying a level playing field and discouraging investments in Pakistan,” Dar said.
Dr Shah promised to look into the matter and also to hold conferences on Diamer Bhasha Dam after the approval of the Dasu Hydro Project by the World Bank as this would send strong signals about the improved health of Energy Sector in Pakistan.
