Asian Development Bank declines funding for Pakistan dam

29 Oct 2016 | By Supriya Kaur

Asian Development Bank (ADB) has refused to provide funding for Pakistan's $14 billion Diamer-Bhasha dam project on Indus river located in Pakistan-Occupied-Kashmir (PoK).

This refusal comes two years after the World Bank declined to fund the project as Pakistan had refused to seek a No-Objection-Certificate from India.

A feasibility study is currently underway for the dam by the United States Agency for International Development.

In context: Pakistan's $14 billion dam project finds no takers

AboutThe Diamer-Bhasha dam

The Diamer-Bhasha dam (DB dam) is located in a disputed area in Gilgit-Baltisan.

India opposes the building of this dam as it's proposed to be located in PoK which is also claimed by India.

The DB dam's storage capacity is expected to be over 6-million acre feet and have an estimated power-output of 4,500 MW that can potentially wipe-out half of Pakistan's energy shortfall.

Running into hurdlesConstruction of DB dam contentious

For long, India has protested any third-party's attempt to support DB dam.

Last year, the US gave indication to offer support to the project; India promptly expressed its displeasure.

Pakistan's repeated attempts to get funding have been unsuccessful given the dam's location in a disputed area.

Reportedly, even China is keen to maintain a distance to avoid getting involved in an Indo-Pak water war.

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China keeping a distance

Despite China's massive investments in the China-Pakistan-Economic-Corridor (CPEC), China appears reluctant to offer support to DB dam. It was reported that Pakistan formally requested China for allocation of funds out of CPEC budget for the dam project however China neither confirmed nor denied the request.

29 Oct 2016Asian Development Bank declines funding for Pakistan dam

India's pressure working?

Priyanka Singh at the Institute for Defence Studies and Analyses, explained, "The refusal from and reluctance of international financial institutions such as the ADB and World Bank to fund the project, allegedly at India's insistence, have somewhat constrained Pakistan's geo-economic designs in the region."

DetailsADB suggests future strategy for Pakistan's DB dam

The Pakistani government has been advised by the ADB to adopt a more professional approach.

Given the mammoth financial requirements and possible risks, its funding appears unlikely by a single party; ADB recommended Pakistan to focus on forming partnerships to access funding.

Restructuring the DB-dam project by separating land acquisition, power generation, dam structures and their modes of financing was also advised by ADB.