LAHORE: By demonstrating capability of raising up to eighty percent funds independently, Pakistan Water & Power Development Authority (WAPDA) has been on course to become financially autonomous in true sense, says its top executive.
“With improved corporate governance, we have been able to source as much as four-fifths of required funds from international investors autonomously in addition to 20 percent allocations by the federal government,” said Lt. Gen. (Retired) Muzammil Hussain, Chairman WAPDA, while talking to The News. “For medium-term, we aim to generate $2.4 billion in the next four to five years through Green Bonds, securing annually between $500-600 millions on average.
Hussain said WAPDA was planning to raise money in a way that it could be efficiently used with minimal processing cost in a staggered manner in line with project timelines.
“So, from scratch, WAPDA has finally been able to lure international investors by attracting $500 million foreign direct investment without sovereign guarantee or pledging any asset but introducing strict financial discipline within two years following presenting the ‘Decade of Dams’ plan to federal Cabinet in 2018,” he said.
In today’s complex environment, he said, challenges had multiplied, while executing the herculean task of constructing mega water and energy infrastructure projects.
“Funds generation has been one of the biggest challenges that creates obstacles in completion of projects as per schedule, causing unbearable cost escalation and to address this challenge, we have embraced an innovative financial model in order to achieve fiscal autonomy,” Chairman WAPDA said. Talking about ongoing infrastructure schemes, he said WAPDA was presently executing $26 billion worth of projects with a deadline to complete them by 2029. The WAPDA chief said Diamer Basha Dam would cost $14 billion, Dasu Hydropower Project $8 billion, Mohmand Dam $3 billion, while other small projects worth $1 billion were also under construction right now.
“Out of the total required amount of $26 billion, the government is chipping in only 20 percent of expenditure,” Hussain said and added, “The government doesn’t have such huge funds, we are left with no option but to raise money from the international market”.
“For this we first had to get rated by the leading credit rating agencies to sell bonds through the LSE (London Stock Exchange), which we successfully did by mid-2021,” he said. While throwing light on WAPDA’s journey to improve financial management, he said, three leading credit rating companies including Moody’s, Fitch, and S&P, also called the Big Three, completed the audit of WAPDA’s financial system in four months to make WAPDA compliant and able to attract international investors by listing at LSE. “By doing so, it is a matter of fact that we are the only enterprise in Pakistan that has undergone such rigorous financial scrutiny. Resultantly, we are geared up to launch Pakistan’s first green bond, Indus Bond, this year with a resounding success,” he observed.
It was a hard-earned feat for WAPDA to be self-reliant in raising money as it had gone through strict scrutiny of credit rating agencies and investors, the WAPDA chief said.
Elaborating what Hussain called a close link between economic development and WAPDA, being the central part of the energy sector, he said, “Everything revolves around energy and water when it comes to meeting needs of agriculture, industry up to the domestic consumers”.
Referring to an anonymous quote, he said, there were no ills on the economic front in any country which could not be traced back to water.
“Maybe it is in abundance or scarcity. Nexus of water and power assume paramount importance when it comes to maintaining the resilience of any economy. Water and power are also considered indispensable for ensuring human and food security coupled with energy security of the country. If we fail to ensure human and energy security, we may fail to achieve sustainable economic development,” Chairman WAPDA said. It may be noted that WAPDA is presently constructing ten projects including Diamer Basha Dam, Mohmand Dam, Dasu Hydropower Project, Nai Gaj Dam, Kachhi Canal Extension, Sindh Barrage and K-IV Project during ‘Decade of Dams’, ending 2029.
After completion of these 10 under construction projects, the gross water storage capacity would increase from 13 million acre feet (MAF) to more than 24 MAF with an addition of 11.7 MAF, sufficient to irrigate another 1.6 million acres of land. In addition, 950 million gallons of water per day would also be made available for drinking purposes to Karachi and Peshawar.
The installed hydel generation capacity would be doubled to cross 18,000 MW with an addition of 9,000 MW on completion of these projects, generating additional 34 billion units against present 37 million units annually.
The under construction WAPDA projects would also provide about 35,000 job opportunities during the construction.