Manila, Dec 23, 2006 AEST (ABN Newswire) - Asian Development Bank (ASX: ATB) will help improve management of Punjab's (a province of Pakistan) water resources and increase productivity of the province's irrigated agriculture through a multitranche financing facility of up to US$900 million.
The program will meet about a quarter of the estimated total cost of $3.5 billion to upgrade the state's irrigation and water resources infrastructure to modern standards.
Irrigated agriculture in Punjab accounts for more than a quarter of the province's gross domestic product output, employs about half of the labor force, and uses more than 90% of water resources. However, its service level has been adversely impacted by demographic pressures, new production technologies, climatic changes, cropping patterns, floods, etc. Cropping intensities have also increased significantly since original development of the irrigation systems.
In response to these developments, farmers have adapted in various ways, including developing private tubewells, which provide more than half the irrigation water in some areas - but which are using groundwater resources at a higher than desirable rate.
To address such problems, the program will finance comprehensive rehabilitation and upgrading of the Punjab's irrigation infrastructure, improve strategies and practices for groundwater management and facilitate improved irrigation technology.
"The program takes a holistic and integrated approach to improving sector performance supported by infrastructure investment combined with institutional reform," says Thomas Panella, an ADB Senior Water Resources Management Specialist.
"There will be a focus on sustainability, decentralized management, transparency, and accountability. The result will be higher economic growth, and more sustainable use of water and land resources. The primary benefit to farmers will be improved agricultural production from increased yields, greater cropping intensity, and scope for diversification into higher value crops."
Recognizing the sector's importance to generating higher incomes and growth, the Pakistan Government asked ADB to extend financing through a multitranche financing facility over 10 years that can be converted into separate loans.
The first two loans will total $227.8 million - $217.8 million from ADB's ordinary capital resources and a one-off $10 million loan from its soft loan instrument, the Asian Development Fund (ADF), to finance the Lower Bari Doab Canal Improvement Project.
This project will improve Balloki Barrage and the Lower Bari Doab Canal system that supply irrigation water to more than 700,000 hectares. This initial project will help define the approach and modalities governing subsequent investments.
The Lower Bari Doab Canal system was built before 1917 and has created an important agricultural area serving the markets of Lahore and Multan. The project will increase irrigation water supply and enhance the equity of its distribution, improve infrastructure safety, mitigate flood risks, as well as develop and strengthen water management and irrigated agriculture institutions.
Other investments expected to be supported by the facility over the 10 years include rehabilitation and upgrading and institutional reforms for Pakpattan, Thal, and Sidhnai canal systems and improvements for Sulemanki, Trimmu, and Punjnad barrages.
The executing agency for program is the Punjab Irrigation and Power Department, which is responsible for operation and maintenance, and management of surface irrigation systems that cover 8.4 million hectares in the province and is part of the largest contiguous irrigation system in the world.
Contact
Graham Dwyer
Email: gdwyer@adb.org
Tel:+632 632 5253;
Mobile: +63 920 938-6487
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