Pakistan on Monday signed two agreements with the World Bank for making improvement in electricity distribution and transmission infrastructure worth 256.7 million dollars and water sector capacity building and advisory services for its efficient management worth 38 million dollars. The financing agreements for both projects were signed by acting Secretary of Economic Affairs Division Junaid Iqbal Chaudhry on behalf of the government of Pakistan and Country Director Yousapha B. Crookes on behalf of the World Bank. Later, Junaid Iqbal Chaudhry told journalists that the soft International Development Agency (IDA) credits, amounting to 52.6 million dollars for Electricity Distribution and Transmission Improvement Project (EDTIP) and 38 million dollars for water sector capacity- building and advisory services (WSCAS) were interest free, however, the service charges at the rate of 0.75 percent and commitment charges at the rate of 0.5 percent on undisbursed balance would be payable. He said the EDTIP also contained hard IDA for 30.5 million dollars on which interest at the rate of 4.2 percent per annum would be paid, in addition to the service charges and commitment charges. He said that the Government would repay both the IDA credits in 35 years, including a grace period of 10 years. For the IBRD loan portion in EDTIP of 173.6 million dollars, a front-end fee would be paid at the rate of 0.25 percent of the loan amount, and the interest would be paid at the rate equal to Libor for the loan currency plus the fixed spread, he added. The IBRD portion would be repaid in 30 years, including the grace period of five years, he said. The EDTIP would assist the distribution and transmission companies in strengthening the infrastructure to meet the increase in electricity demand more efficiently and with better reliability. He said the major problem was the load management in our system as with the gradual increase in power demand, the transmission and distribution infrastructure was not expanded accordingly and now the load was over and above its capacity, which resulted in frequent breakdowns and added to over increasing problem of load shedding. He expressed the hope the project would also strengthen the institutional capacity of power distribution companies and support reforms in priority areas of power sector through investment in distribution networks, investment in transmission network, institutional strengthening and capacity building and energy efficiency. The objective of the water sector capacity building and advisory services project (WSCAS) is to improve the management and investment planning of water resources in the Indus river system through capacity building and support of Federal institution in water resource planning and management, improvement in water resources management and development in Water and Power Development Authority (Wapda), project management and additional studies. He said this process would run side by side with the national plan to develop hydel storage and power infrastructure. World Bank Country Director Yousapha B. Crookes said that the bank remained involved in different development projects with the government of Pakistan and now taking part in power distribution and transmission, which was very important for revenue generation. He said this was an important area for rapid growth of industrial sector, besides providing quality electricity service to the consumers. The project agreements for electricity distribution and transmission improvement were signed by the representatives of NTDC, IESCO, LESCO, MEPCO and HESCO on behalf of the respective entities. Copyright Business Recorder, 2008