Diamer Bhasha Dam: Govt to approach China, local banks for financing

With power shortage increasing continuously in the face of rising consumer demand, the government has decided to seek financing from China for the mega $13 billion Diamer Bhasha Dam with power production capacity of 4,500 megawatts and also take loans from domestic commercial banks by offering guarantees.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, for which multilateral donors including the World Bank and Asian Development Bank (ADB) had sought no-objection certificate (NOC) 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. During the meeting, different options were considered for arranging capital for the dam, which is vital for wiping out most of the gap between electricity demand and supply in the country.
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 prime minister has been briefed on the plan for seeking financing from China and he will discuss it with his Chinese counterpart during the upcoming visit," the official said. The Chinese government had already offered Pakistan skilled labour for