, China

Pakistan approaches China for financing of Diamer Bhasha Dam

The government of Pakistan has sought financing from China for the mega $13 billion Diamer Bhasha Dam.

It will also take loans from domestic commercial banks by offering guarantees.

The dam has a power production capacity of 4,500 megawatts.

According to sources, Prime Minister Raja Pervez Ashraf will place a request before his Chinese counterpart during the visit on September 10 for financing the Diamer Bhasha Dam.

Multilateral donors including the World Bank and Asian Development Bank had sought no-objection certificate from India due to the dam "being situated in a disputed territory".

The decision to approach China was taken in a meeting held at the Planning Commission last month as Beijing had wide experience of building large dams, a senior government official said. In the meeting, the government officials also decided to borrow money from banks with 50% guarantees to be provided by the central government and the remaining by the Water and Power Development Authority (Wapda).

The loans will be taken against security of assets like turbines of dams. "

The Chinese government had already offered Pakistan skilled labour for the construction of the dam. Beijing has 17,000 skilled workers, who worked on the Three Gorges Dam, which is producing 30,000 megawatts of electricity. Sources said China had also assured Pakistan that it would hire a company to finance the construction of the dam. China Development Bank was also willing to pour money into the project. However, they said China would seek guarantees from the Government of Pakistan.

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