The governments of Japan and Pakistan signed a loan agreement amounting to Japanese Yen 2.665 billion (equivalent to $ 24 million) for implementation of ‘Islamabad-Burhan Transmission Line Reinforcement Project (phase-I).’
Ambassador of Japan Takashi Kurai and Anjum Assad Amin, Additional Secretary Economic Affairs Division (EAD), signed the loan documents. Nobuo Kishi, State Minister of Foreign Affairs of Japan, and Khawaja Muhammad Asif, Minister for Water and Power, witnessed the signing ceremony.
The scope of the project includes civil work and equipment for transmission lines of 220 KV between the Tarbela Hydropower Plant and the Burhan sub-station. The government of Japan has provided the loan on very concessional terms and conditions with interest rate of Japanese Yen LIBOR plus 10bps (equivalent to 0.12%) and repayment during 30 years including 10 years grace period.
The Economic Coordination Committee (ECC) on April 28, 2017 approved the loan on the concessionary terms with an interest rate of Japanese Yen Libor plus 10bp, repayable to over a period of 30 years including a grace period of 10 years with general united procurement conditions for the project under Official Development Assistance (ODA) upon the request of Pakistan.
The main objective of the project was to improve reliability of national grid and meet growing demand for electricity transmission through reinforcement of transmission lines necessary for power supply to Islamabad Capital Territory and surrounding areas. The ECC has exempted loan from all levies and taxes in terms of sub-section 53 of the Income Tax Ordinance 2001 section 13 of Sales Tax Act and Section 19 of the Customs Act 1969.
Minister for Water and Power Khawaja Asif, who witnessed the ceremony, stated that Pakistan values Japan’s assistance in the field of energy and Japan’s economic cooperation has played imperative role in development of socioeconomic sector with main focus on human uplift, poverty reduction and capacity building of Pakistani institutions. Energy sector has direct impact on economic growth and prosperity of Pakistan. He said total loan assistance from the government of Japan stands at $ 960 million and grant at $ 156 million.
