The Economic Affairs Division (EAD) has reportedly approached the federal cabinet for ratification of a loan agreement with French Development Agency, after passage of 10 months time, sources told Business Recorder here on Tuesday.
The sources said that in response to a request of government of Pakistan, Agence Française de Développement (AFD) agreed to provide soft loan of 26.5 million Euros for rehabilitation of 22 MW Jabban hydroelectric power generation project situated in Khyber Pakhtunkhwa.
The Executive Committee of the National Economic Council (Ecnec) approved PC-1 of the project in its meeting on December 9, 2010 at a cost of Rs 3.754 billion with foreign exchange component of Rs 1.649 billion.
The loan is for a period of 18 years including a grace period of three years with floating interest rate of Euribor 6 months (currently 1.4 per cent). The credit will be re-lend to Water and Power Development Authority (Wapda) in accordance with government's re-lending policy 2009.
The sources said, AFD had conveyed urgency for signing the loan agreement by July 26, 2010 to avoid the lapse of the loan. On this request, Prime Minister approved the signing of credit facility agreement with AFD under rule 16(2) of the Rules of Business 1973 and directed to subsequently place the matter before the cabinet for its ratification, the sources concluded.
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