ADB to provide $900 million for water management

Asian Development Bank (ADB) will help improve management of Punjab, Pakistan''s water resources and increase productivity of the province''s irrigated agriculture, through a multi-tranche financing facility of up to 900 million dollars.
The loan was signed on Friday at the Economic Affairs Division by Secretary Economic Affairs Division Akram Malik, Secretary Irrigation and Power Punjab Arif Nadeem and ADB''s Country Director to Pakistan Peter Fedon.
The programme will meet about one quarter of the estimated total cost of 3.5 billion dollars to rehabilitate and upgrade the state''s irrigation and water resources infrastructure to modern standards, said an official statement on Friday.
Irrigated agriculture in Punjab accounts for more than one quarter of the province''s gross domestic product output, employee about half of the labour force, and uses more than 90 percent of water resources. But much of the irrigation infrastructure is 100 years old and has seriously deteriorated over time, resulting in unreliable service. Cropping intensities have also increased significantly since original development of the irrigation systems.
In response to the often unreliable and inadequate canal water, farmers have adapted in various ways including developing private tube wells, which provide more than half of the irrigation water in some areas, but are using groundwater resources at an unsustainable rate.
To address such problems, the programme will finance comprehensive rehabilitation and upgrading of the Punjab''s irrigation infrastructure, improve strategies and practices for groundwater management, facilitate improved irrigation technology, and institute sector reforms.
"The programme takes a holistic and integrated approach to improving sector performance supported by infrastructure investment combined with institutional reform," says Thomas Panella, an ADB Senior Water Resources Management Specialist.
"There will be a focus on sustainability, decentralised management, transparency, and accountability. The result will be higher economic growth, and more sustainable use of water and land resources. The primary benefit to farmers will be improved agricultural production from increased yields, greater cropping intensity, and scope for diversification into higher value crops."
Recognising the sector''s importance to generating higher incomes and growth, the Pakistan government asked ADB to extend financing through a multi-tranche financing facility over 10 years that can be converted into separate loans.
The first two loans through the facility will total 227.8 million dollars - 217.8 million dollars from ADB''s ordinary capital resources and a one-off 10 million dollars loan from its soft loan instrument, the Asian Development Fund (ADF) to finance the Lower Bari Doab Canal Improvement project.