Bid & Tender
ADB Hopes TAPI Project to be Completed in Next Five Years

Date : May 06, 2016

Despite having security concerns for materialising the much-awaited $10 billion TAPI (Turkmenistan-Afghanistan-Pakistan and India) gas pipeline, the Asian Development Bank (ADB) hopes that this flagship project of regional connectivity would now be on the ground and would be completed in the next five years.

 

“All four member countries have established a project company by contributing initial money of $200 million, which will pave the way for the construction of 800-kilometre-long pipeline for 33 billion cubic feet of gas,” ADB’s Director General for Central and West Asia Department Sean M. O’ Sullivan told reporters during a media briefing on the sidelines of the 49th annual meeting of Manila based bank here on Wednesday.

 

The ADB, he said, is also working with Pakistan for providing $150 million energy sector development programme which is expected to go to the board for approval by the end of this calendar year. Another $300 million loan programme for restructuring of state owned enterprises (SOEs) including Railways is expected to be approved next month (June 2016) which will make SOEs commercially viable. The ADB is also considering providing a facility of $50 million to Pakistan’s commercial banks.

 

In another bid to connect the energy rich country with energy deficient countries in this region, the ADB is working on transmission line from Turkmenistan to Afghanistan, which will then be connected with Pakistan under the TAP project for which the ADB will finance $600 million. It will supplement the CASA-1000MW project from which the ADB had pulled out around 2009. Flanked by Hong Wei, Deputy Director General of ADB, Sullivan said that even Afghanistan had paid its equity share for establishing the project company for the TAPI gas pipeline. The major challenge for TAPI project will be ensuring security in the region but it is hoped that it will be overcome, he added.

 

He said that under new arrangement, Pakistan’s resource envelop in terms of its quota for seeking financial assistance from the ADB went up from $1.2 billion per annum to around $2 billion per annum but it would depend upon the country’s ability to show results on pledged commitments.

 

He said that under the initiative of Central Asia Regional Economic Cooperation (CAREC), the consortium of donors made plans for investing $28 billion on infrastructure and energy projects.

 

To a question regarding volatile security environment in Afghanistan and non interest shown by giant oil and gas companies in the TAPI project, the ADB’s DG said that international oil companies might come in and for overcoming security concerns the communities would be involved for protecting the pipelines.

 

The ADB, he said, has been selected as transaction advisor and termed it as major achievement on account of regional connectivity. Turkmenistan, he said, had already kick-started work on this project and now the work will be done to finalise design of the pipeline. He said that Islamic Development Bank (IDB) had committed $800 million.

 

Under the initiative of CAREC, he said that Pakistan had already received $1 billion loan for construction of different road networks. He said now the ADB was planning to get involved into restructuring of Pakistan Railways, hydro and renewable energy to ensure energy security.

 

The ADB provided assistance to Pakistan for Jamshoro coal project, although its working slowly and for bringing improvement in generation, transmission and distribution system of the country. The ADB provided $400 million for providing solar bulbs in the country.

 

Regarding signing of Memorandum of Understanding between ADB and Asian Infrastructure Investment Bank (AIIB) for co-financing road project in central Punjab, he said it would be fourth installment of 386 kilometer road network for which now the AIIB joined as partner.

 

This section of road, he said, will have estimated cost of $273 million including $100 million from AIIB, $100 million ADB, $34 million UK based-DFID and remaining $39 million by govt of Pakistan.