November 2006 News

IDB to fund Diamer-Bhasha dam

6 November 2006
The News International
Khalid Mustafa

Islamabad: Islamic Development Bank (IDB) President Dr Ahmed Muhammad Ali pledged here on Monday the bank would finance the Diamer-Bhasha Dam project once its feasibility study was completed. Addressing a press conference on the second day of the World Islamic Economic Forum (WIEF) along with other senior officials of the bank, he also indicated that his bank would meet financial infrastructure development requirements of Pakistan, including funding for dams, through establishment of Special Infrastructure Development Fund for the country. Dr Muhammad Ali said the IDB has received a request from Indonesia for establishment of $145 billion Infrastructure Development Fund and the bank would respond to it after examining the details. Quoting initial estimates, he said financing requirements of infrastructure development of the Islamic countries are over $800 billion. The areas mainly include power, communications, transport, education, health and other sectors. He said the IDB has approved $750 million for its member countries, including Pakistan and has provided $150 million for two infrastructure development projects from its existing infrastructure development financing facility. This fund, he disclosed, has not only met the financing requirements of member countries but also proved a success. The IDB operations are profitable and this profitability will help the Bank attract western investors to Islamic countries through this and other funds to be established under the IDB. He said that the IDB along with other donor institutions has received presentation on its infrastructure development needs during last Pakistan Development Forum. The IDB will also consider financing of other infrastructure development projects when these would be brought before it by the Government of Pakistan. He said the IDB has already approved $500 million earthquake relief assistance for Pakistan and has also received another request of $220 million for re-construction purposes. The bank has already disbursed 50 per cent amount for the construction of 31,000 homes in the earthquake-affected areas. The IDB is also examining two more financing requests from Pakistan pertaining to infrastructure development projects - the Bong Escape power project ($37 million) and the Attock Power Project ($60 million). He said the IDB board of governors has already approved Vision-2020 for the Islamic Development and has identified eight areas for its future operations so that this important institution is effectively used for economic as well as social development of the Islamic countries and communities residing in non-Islamic countries of the world. Dr Ahmed Muhammad Ali added that the IDB, in order to promote trade financing requirements of the member countries, has approved establishment of new organisation for trade financing. This organisation is under ratification process and will help promote trade in an effective manner in the member countries. The IDB will also help develop more effective mechanism for managing Zakat system for the member countries and facilitate members for its operations. He said fighting poverty is the real challenge for the Muslim countries and the IDB's extra ordinary summit held at Kuala Lumpur recently established IDB poverty alleviation initiative 'Solidarity Fund' for its member countries. Saudi Arabia has announced $1 billion and Kuwait $300 million as contribution to this fund. He hoped that many more countries would come forward and contribute to this fund for its success.


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