Pakistan, World Bank sign $406.6m loan agreement for KPEC

'Khyber Pass Economic Corridor Project aims to construct a 48km-long, dual carriageway, access-controlled motorway from Peshawar to Torkham'

ISLAMABAD: Pakistan and the World Bank on Friday signed the financing and project agreement $406.6 million for Khyber Pass Economic Corridor Project (KPEC).

“The project aims to construct a 48km-long four-lane, dual carriageway access-controlled motorway from Peshawar to Torkham,” said a statement issued by the Economic Affairs Division. “This project will promote economic development and uplift areas adjoining expressway falling in Khyber Pakhtunkhwa.”

According to the statement, the project envisages the use of public-private partnerships to develop clusters of economic zones and expressways. The connecting transport infrastructure and economic zones would provide a strong foundation for private businesses to invest in these zones.

“The global integration of South and Central Asia is intertwined with the Khyber Pass and has served as the key node in trade for hundreds of years. The expressway between Peshawar and Kabul through the Khyber Pass represents a section of Corridors 5 and 6 of the Central Asia Regional Economic Cooperation (CAREC). Corridor 5, which runs through Pakistan, has the potential to provide the shortest link between the landlocked countries of Afghanistan, Tajikistan, Uzbekistan and the Arabian Sea. Corridor 6 provides access to Europe, Middle East and Russia. The KPEC will finance Peshawar-Torkham expressway portion of Corridor-5.

“The Peshawar-Torkham expressway will reduce transit time and costs for regional and international trade transiting the Khyber Pass and extend till Karachi – Lahore – Islamabad – Peshawar Trans-Pakistan Expressway System. It will form as an integral part of the planned Peshawar – Kabul – Dushanbe Motorway. The improved regional connectivity through this corridor will not only facilitate the commercial traffic and expand economic activities between Pakistan and Afghanistan but also promote private sector development along the corridor. It is expected to generate up to 100,000 new jobs in Khyber Pakhtunkhwa,” the statement read.

Speaking on the occasion, Economic Affairs Minister Hammad Azhar said the signing of this important project indicates the World Bank’s resolve to support the development agenda of Pakistan.

World Bank Country Director Patchamuthu Illangovan, while appreciating the reform initiatives of the incumbent government, said that the bank stands committed to extending all possible facilitation and financial support to the government in its efforts to promote economic activities in the country and to put the economy back on track.

Economic Affairs Division Secretary Dr Syed Pervaiz Abbas signed the project’s loan agreement on behalf of the Pakistani government while a representative of National Highway Authority (NHA) signed the project agreement. World Bank Country Director Patchamuthu Illangovan signed the agreements on behalf of the bank.

Hammad Azhar thanked World Bank for extending its continuous support to the government in its efforts to achieve sustainable economic development in the country.


  1. Why is Pakistan paying for an expressway to Afghanistan that will never actually connect to Central Asia given the insecurity in Afghanistan? Wouldn’t it be better to use this money to connect our own cities? Hyderabad-Mirpurkhas, Karachi northern bypass, Rawalpindi bypass from airport to Gujjar Khan, or Mansehra to Muzaffarabad would all be a better use of this money. Instead, we are paying to build a motorway so that Afghanistan can easily trade with India?


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