*ISLAMABAD: *Pakistan has finally approved the construction ofDiamer-Basha Dam at an initial estimated cost of Rs625 billion. It willmostly be funded through local resources after international financialinstitutions and China showed reluctance to help the country build thereservoir.
The Central Development Working Party (CDWP) cleared the project for thefinal approval of Executive Committee of National Economic Council (ECNEC),according to the Ministry of Planning and Development. Headed by PlanningCommission Deputy Chairman Sartaj Aziz, the CDWP also cleared the Rs303billion Mohmand Dam Hydropower Project for the final approval of the ECNEC.
With a cumulative cost of Rs928 billion, these projects will help thecountry address two serious issues – water shortage and power generation.The Mohmand Dam project will have power generation capacity of 800megawatts. Diamer-Basha Dam project is only being built as a waterreservoir for now, as the government initially excluded the powergeneration component, which would cost another Rs744 billion.
The total cumulative cost of Diamer-Basha Dam will be minimum Rs1.4trillion once power generation facilities are accounted for.
This is very big decision and the government will fund the dam by providingmoney from the budget, while the Water and Power Development Authority willarrange commercial financing. He said that under the new Water Policy, thePlanning Commission has recommended enhancing the water sector allocationsand the funds required for the construction of the dam can easily beprovided.
The government will be required to provide around Rs48 billion per annumfor the construction of the dam.
The federal government will provide Rs370.2 billion from the budget in agrant, which will cover 57% of the cost. Wapda will raise Rs115.9 billionfrom its own sources as an equity investment, and the authorities willborrow Rs163.3 billion in commercial loans, according to the projectdocument.