The Asian Development Bank is planning to explore opportunities of co-financing a motorway project in Pakistan with Asian Infrastructure Investment Bank, a China-led institution largely seen as a counterweight to IMF and the World Bank,
The ADB will seek AIIB assistance for the construction of a section of the M4 motorway project, near the China Pakistan Economic Corridor, ADB’s Country Director for Pakistan, Warner Leipach, told Finance Minister Ishaq Dar at a meeting in Islamabad on Dec. 14, says a Pakistan government announcement.
An initiative of China to break the monopoly of international lenders such as the IMF and the World Bank, the AIIB is expected to become operational by the end of this year. As many as 57 founding members, including Pakistan, signed the Bank’s article in June this year. China, India and Russia are the three largest shareholders of the bank.
The proposed co-financing between ADB and AIIB is for the Shorkot-Khanewal section of the M4 that runs near the $46 billion China Pakistan Economic Corridor – a landmark Chinese investment in Pakistan mainly focus on infrastructure projects.
Apart from AIIB, ADB is also planning to explore opportunities of co-financing through Islamic Financing, which is gaining increasing role in the global financing. ADB plans to provide financing of around $1.2 to $1.5 billion dollars for Pakistan, mainly in the field of infrastructure under the Public Private Partnership mode.
ADB’s total co-financing for Pakistan stood around $1050 million including $400 million grant commitments from DIFD. ADB has also provided trade finance support for the private sector investments to the tune of $95 million.
The government of Prime Minister Nawaz Sharif, which took over in 2013, has made a significant investment in the country’s infrastructure projects with an aim to boost industrialization in South Asia’s second biggest economy.