ISLAMABAD: The dam portion of Diamer-Bhasha project will be built through indigenous financing plan under which the government will provide Rs234 billion through PSDP in the shape of grants and Wapda will provide its equity of Rs100 billion.
And the amount of $1.4 will be generated through Wapda bonds from the international financial markets without the government’s sovereign guarantee as in a major development, international credit rating companies such as Fitch, Moody’s and Standard and Poor’s have equated the credit rating of Wapda with the rating of government of Pakistan. However, the total cost to be incurred on the dam portion is estimated at Rs480 billion.
Wapda chairman Lieutenant General Muzammil Hussain stated this while exclusively talking to The News here on Wednesday. The total cost of the project as of today stands at over $14 billion. He said that the dam portion will be completed in eight and half year-time and next year international bidding will be arranged for installing two hydro power generation plants.
Hussain said that Wapda has emerged as the first public sector entity in Pakistan which has managed its credit evaluation by international rating companies such as Fitch, Moody’s and Standards and Poor’s. The three rating companies have equated the credit rating of Wapda with the rating of the government of Pakistan and because of this every reason, Wapda will float its bonds in the international markets for arranging commercial loans without the sovereign guarantees of the government.
The officials of the three ratings companies, he said, remained with Wapda officials for 5-6 months and evaluated the credit rating of Wapda based on its liquidity, solvency and credit worthiness. The three rating companies carried out the dual diligence of the financial health of Wapda keeping in view the revenue and debt profiles and its ability to off load the debt liabilities.
To a question Wapda chairman said that Wapda requires in every year Rs30 billion for Diamer-Bhasha dam and Rs7 billion for Mohmand dam construction.
The Diamer-Bhasha dam will be roller compacted concrete (RCC) with a height of 272 meters. It will be having the gross storage capacity of 8.1 MAF (million acre feet) of water and live storage of 6.4 MAF. The project will be able to generate 4500MW of electricity. The project will be completed in a segmented approach. First the dam portion will be completed with indigenous resources and once the dam portion is completed then two power houses will be built. Once this project is completed then the age of Tarbela dam will increase by 30-35 years more as the silt being piled up with rapid pace will slow down as it will be barred in the Diamer-Bhasha dam.
It is pertinent to mention, no donor and international financial institutions (IFIs) are ready to fund the project.
