The Economic Coordination Committee (ECC) chaired by Finance Minister Ishaq Dar took the decision on Friday to approve the government’s guarantee for repayment of $140m loan which accounts for 40pc of $350 million loan for Dasu Hydropower Project.
In addition, the World Bank will be providing a guarantee for the remaining $210m loan amount.
The Ministry of Water and Power, in its proposal, said that the PC-I of the Dasu Hydropower project was approved by ECNEC at a cost of Rs486b in March 2014. The project is being financed by the World Bank through IDA Credit; $573m credit is operational while the additional IDA/IBRD credit of $273m is expected in the 2017 cycle along with a Partial Credit Guarantee (PCG) of $920m ($460m x 2) to raise the foreign cost component (FCC).
A loan agreement of Rs144b comprising of both conventional and Islamic Finance Facility has been agreed as a local commercial requirement, with a consortium of seven local banks. Out of the total, Rs88b would be raised against the GoP guarantee while Rs56b will be against Wapda’s balance sheet.
For the foreign cost component, it was agreed with international banks including the World Bank, that Wapda would raise $350m through the international capital market on a 10 year term by using PCG of up to 60pc ie $210m while the remaining amount comprising of principal and interest would be guaranteed by the GoP.
