Pakistan: Punjab Irrigated Agriculture Investment Program–Tranche 2
In December 2006, the Asian Development Bank (ADB) approved a $900.0 million equivalent multitranche financing facility (MFF) for the Punjab Irrigated Agriculture Investment Program (PIAIP) to finance improvements to Punjab’s irrigation sector. At the same time, two loans for tranche 1 totaling $227.8 million equivalent were approved using the MFF for $217.8 million equivalent from ADB’s ordinary capital resources and $10.0 million equivalent from ADB’s Asian Development Fund (ADF). Tranche 1 consisted of two components: (i) the Lower Bari Doab Canal Improvement Project and (ii) the Punjab Irrigated Agriculture Project Preparation Facility (PIAPPF).
Under the MFF, a second tranche was anticipated to include civil works for the Pakpattan main canal, Sulemanki Barrage, Trimmu Barrage, and development of farmer organizations in Pakpattan, Sidhnai and Thal distribution networks. However, floods in 2010 and 2011 raised the PIAIP’s profile which resulted in a more urgent need for investment in irrigation and flood control infrastructure in Punjab province. In response, the government requested for the second tranche which includes the new Khanki Barrage Construction Project to supply water to the downstream system. In December 2011, the second tranche of the MFF was approved for $270 million equivalent for the construction of a new Khanki Barrage on the Chenab River to replace the 120-year old existing barrage. The new barrage was not only to provide more reliable irrigation water supply but was also to prevent flood damages to productive agriculture land and residential areas around and upstream of the barrage. At the time the second tranche was approved, the government requested a major change in MFF to reduce it to $700.0 million equivalent, because of currency fluctuation gains and a lifting in the cap on ADF funding to facilitate the tranche 2 funding to be sourced from the ADF.
This report validates the completion report's assessment of program. IED overall assessment: Successful.