ADB President Announces US$1 Billion Aid for Quake-Hit Pakistan

ISLAMABAD, PAKISTAN (19 November 2005) - ADB President Haruhiko Kuroda has announced that ADB will provide about US$1 billion in concessional support for the rehabilitation and reconstruction of earthquake-hit Pakistan.

President Kuroda made the announcement at the Donors Conference on Rehabilitation and Reconstruction of Earthquake Affected Areas in Islamabad today. The support, he said, will help meet the estimated $5.2 billion required to reconstruct lost assets and restore services in Pakistan.

"The scale of this catastrophe is stunning," Mr. Kuroda said. "This is clearly the worst natural disaster in Pakistan's recent history. The images of ordinary citizens pulling friends and neighbors from the rubble will remain indelibly etched in our minds."

ADB's support will be provided in a number of stages. About $100 million of savings from concessional loans from eight ongoing projects in Pakistan has been reallocated to the ongoing ADB-backed Decentralization Support Program. These funds will provide budgetary support for earthquake-related rehabilitation and reconstruction activities.

ADB's Resident Mission in Pakistan is also reviewing seven ongoing loans in the earthquake-affected areas to see whether these can be redesigned to address earthquake damage more effectively. The Multisector Rehabilitation and Improvement Project for Azad Jammu and Kashmir is one such project.

A special Pakistan Earthquake Fund has also been established with an initial contribution of $80 million. Similar to the Asian Tsunami Fund ADB created in February in response to the 26 December tsunami, the Pakistan Earthquake Fund will pool and promptly deliver emergency grant financing for projects that support immediate reconstruction, urgent rehabilitation, and other associated development activities.

In early December, a $300 million Earthquake Emergency Assistance project, inclusive of the $80 million from the Pakistan Earthquake Fund, will be considered by ADB's Board of Directors. The project will focus on transport, power, health and education, and governance and institution building.

The balance of ADB's support is expected to be provided in 2006 in the form of a credit line facility to ensure that it can be flexibly used to address the remaining high priority needs of rehabilitation and reconstruction.

"History shows that ownership by all stakeholders, inclusive of Government, civil society, local affected communities, private sector and other development partners is essential to curb corruption in the aftermath of such large-scale disaster," Mr. Kuroda said. "I am confident that the strong sense of ownership shown by the Government and the civil society, and good coordination and cooperation among all involved will help us in this endeavor."

Mr. Kuroda earlier visited the quake-affected areas. "Having seen first-hand the courage and resilience of the survivors, I am convinced that the affected areas will need to not only fully recover but be built in a way to provide a better future for the children," Mr. Kuroda said.

Official government figures as of November 3 estimate that at least 73,318 people were killed in the North West Frontier Province and Azad Jammu and Kashmir, with 2.8 million persons without shelter and an estimated 1.6 million persons without adequate food.

A preliminary damage and needs assessment report released by ADB and the World Bank estimates that Pakistan needs approximately $5.2 billion to effectively implement a relief, recovery and reconstruction strategy. Of this $3.5 billion is for physical reconstruction of housing, schools, health facilities, roads and other public infrastructure.

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