Japan gives $260m loan for power sector

ISLAMABAD: Japan has extended a soft loan of $260 million (23.3 billion yen) to Pakistan for the National Transmission Lines and Grid Stations Strengthening Project, which will cost Rs29.339 billion.
This is the first Japanese loan under the Official Development Assistance (ODA) based on the Pakistan Donors’ Conference hosted by Japanese government in April 2009 where a maximum of $1 billion in aid was pledged over a period of next two years.

Notes to this effect were signed and exchanged between Ambassador of Japan Chihiro Atsumi and Secretary Economic Affairs Division Sibtain Fazal Halim here on Wednesday.

The exchange of notes was followed by the signing of the loan agreement by EAD Additional Secretary Hassan Nawaz Tarar and the Chief Representative of Japan International Cooperation Agency (JICA) in Pakistan, Tomoharu Otake.

Mr Halim said that the objective of the strengthening of transmission lines and grid stations project was to improve the reliability and efficiency of power supply by constructing new while upgrading existing prioritised 500KV and 220KV transmission lines and grid stations in Punjab and Sindh provinces.

The project will contribute to economic development and improvement of standards of living of local residents. It includes enhancement in the transmission system by 220KV Chishtian sub-station; 220KV Gujrat sub-station; 500KV Lahore sub-station; and 500KV Shikarpur sub-station, he added.

The secretary EAD said that Pakistan had not only been experiencing electricity shortage but also faced with a weak transmission lines system because of which supply of power disrupts frequently.

The Japanese loan carries annual interest rate of 1.2 per cent for to be repaid within 30 years, including 10 years of grace period.

The Japanese ambassador said that after the completion of the project, the efficiency of the power transmission would be improved by 156MW, which is equivalent to the annual power consumption of two million people in Pakistan.