Quake-hit areas: ADB to provide $400 million loan to rebuild homes

The Asian Development Bank (ADB) will provide Pakistan government a 400 million dollars soft loan to rebuild homes hit by the 2005 earthquake. This loan carries an interest rate of one percent a year and a maturity of 40 years including a grace period of 10 years.
This will give a new push to house some 30,000 people still living in tents and 3.5 million others in non-permanent dwellings, said a statement issued from Manila, Philippines. The new loan, approved by ADB's board of directors on Wednesday, is part of a one billion dollars pledge ADB made after the 7.6 magnitude quake on October 8, 2005 that killed more than 80,000 people.
The loan will be released in two parts. The first tranche of 200 million dollars will provide support on a retroactive basis for the significant housing expenditures already incurred by the government.
The second tranche, expected to be released within six months of the first, will be used to meet the additional financing needs of the housing reconstruction programme.
In addition to the new loan, ADB will provide a 2 million dollars grant to increase the capacity of Pakistani institutions helping rebuild quake-affected areas. It will provide training in seismic construction, strengthen financial and strategic management, and support environmental and social protection.
"With the last two winters having been extremely harsh, ADB is fully supportive of the government's push to make the upcoming winter the last one without proper homes for most of those displaced by the quake," said C.C. Yu, the ADB Mission Leader. "We are moving this forward as fast as possible."
The injection of funds will be a boost for the region's economy. It will create jobs for reconstruction workers and help businesses supplying materials. Homeowners will be given money directly to repair or rebuild their own homes in accordance with approved designs to make them more resilient to earthquakes in the future.