The Asian Development Bank (ADB) has refused to commit funds for Pakistan’s $14 billion dam project on the Indus river in Pakistan-occupied Kashmir (PoK), two years after the World Bank declined to fund the project following Islamabad’s refusal to seek an NoC from India.
“We did not really make any commitment. This is a very big project,” ADB president Takehiko Nakao said on Wednesday at a joint news conference with Pakistan Finance Minister Ishaq Dar on the conclusion of the 15th ministerial meeting of the Central Asia Regional Economic Cooperation programme.
“We haven’t decided (whether to fund) this project,” he said, adding that the ADB might consider joining the financing of this project at a later date, the Dawn reported. Islamabad has consistently failed to attract foreign lenders for the project.
Repeated efforts to rope in the World Bank as a co-lender had failed two years ago when the Government declined to seek a No objection Certificate from India for the project.
Instead, Pakistan accepted a funding offer from the World Bank to start the Dasu Hydropower project, downstream of Diamer-Bhasha. The ADB also advised the government to adopt a professional approach towards the construction of the big dam that cannot be funded by a single institution, country or group given its mammoth financial requirements and the risks involved.
As a way out, the ADB advised Islamabad to restructure the Diamer-Bhasha dam project by separating power generation, land acquisition and main dam structures and their various modes of financing. The ADB chief also cautioned Pakistan to wisely implement projects under the USD 46 billion China-Pakistan Economic Corridor (CPEC), another strategic project opposed by India as it passes through the PoK, and utilise their funds well so as to avoid debt or repayment problems.