Infrastructure damaged by floods: ADB decides to invest $650 million

The Asian Development Bank (ADB) has decided to invest $650 million in reconstruction of vital infrastructure damaged by the last year's devastating floods in Pakistan. This was announced by Hassan Nawaz Tarar, Additional Secretary of Economic Affairs Division at the signing ceremony of the agreement. Rune Stroem, ADB's Country Director for Pakistan was also present on the occasion.
The recent floods in late July 2010 triggered by heavy rains in Balochistan, Punjab, Sindh and Khyber-Pakhtunkhwa submerged approximately one-fifth of the country's total land (796,095 square kilometres). The devastating floods caused around $10 billion damage, displaced millions and destroyed crops and livestock. Pakistan is still feeling the impact. Floodwaters washed away vital link roads and bridges.
The financial assistance provided under the Flood Emergency Reconstruction Project (FERP) will be spent on rebuilding the damaged national and provincial road networks, irrigation systems, and flood protection structures along with to help the affectees to kick off economic and livelihood activities.
A total of $600 million of FERP resources comes from Ordinary Capital Resources (OCR) with a 32-year term, an eight-year grace period and interest set in accordance with ADB's LIBOR-based lending facility. Another $50 million equivalent will be tapped from ADB's concessional Asian Development Fund, which will have a repayment term of 40 years, with a 10-year grace period and interest charges at 1 percent per annum. ADB will also provide $4 million grant for capacity building technical assistance to strengthen implementation and oversight of the project.
'Rebuilding the roads, irrigation and flood protection structures will help resume economic activities and secure livelihood of farmers, and protect all other facilities from future disasters. This investment is designed not just to rebuild what has been damaged but to build it to better standards, said Rune Stroem, ADB's Country Director for Pakistan.
The FERP will reconstruct 793-km of national highways and bridges and 800-km of provincial road networks to multiple hazards resistant standards. The project will improve 1.5 million hector of agriculture land by restoring and strengthening flood protection embankment, rehabilitating canals and other allied infrastructure.
The investments will re-establish inter-regional connectivity, access to markets, and will boost the reconstruction and livelihood restoration processes in the affected areas. In addition, ADB as a part of its overall post-flood support increased the trade finance facility to Pakistan by $500 million, providing extra cover to emergency imports and exports during the reconstruction period, and also contributed $3 million grant to enable National Disaster Management Authority to respond to existing and future emergencies and disasters in an effective manner.-PR