ISLAMABAD: The United States has asked Pakistan to securitise assets of different dams including Tarbela and Mangla in order to seek funds from international donors for the multi-billion-dollar Diamer Bhasha Dam.
The suggestion came in a meeting between US embassy officials and Federal Water and Power Minister Ahmed Mukhtar here.
The diplomats assured the minister that the US would play its role in generating funds to meet the entire cost of $13bn for the 4,500-megawatt Diamer Bhasha dam and power project by becoming part of a consortium, led by the Asian Development Bank (ADB). Earlier, the ADB had refused to lead the consortium.
Pakistani authorities expect to raise $3bn by securitising assets of Tarbela and Mangla Dam, but the US officials insist that all the cost of Diamer Bhasha project will be covered by implementing the securitisation plan.
Securitisation means creation of an investment instrument by combining financial assets and then marketing different tiers of the repackaged instruments to the investors.
A video conference will be held next month in Washington involving a US energy team and officials of the Water and Power Development Authority (Wapda) to discuss the implementation of the plan of securitising assets of dams. The government is facing difficulties in generating funds for Diamer Bhasha Dam as theWorld Bank has sought no-objection certificate (NOC) from India, which says that the planned dam site is situated in a “disputed territory”.
Other donors have offered funds for Dasu hydropower project instead of Diamer Bhasha.
A three-member team of the US embassy, led by Economic Assistance and Development Counsellor Richard Albright, met Water and Power Minister Ahmed Mukhtar and discussed the cooperation in the power sector, management and improvement in power distribution companies and financing for Diamer Bhasha Dam.
Praising US cooperation and assistance, Mukhtar said it would help to improve the efficiency of public sector power utilites. The government, he said, was working on power sector reforms, rehabilitation and upgrading of generation companies, improvement in distribution companies, power theft control and reduction in line losses.
Mukhtar pressed for US assistance as well as from the ADB and other donors for the all-important Diamer Bhasha Dam - termed a lifeline for the country’s economy. He also discussed the chances of US investment in coal and wind power projects.