The Asian Development Bank (ADB) will loan an estimated $100 million to Pakistan for the construction of the Gojra-Shorkot section of the M4 motorway project.
The board of directors of the Manila-based lending agency approved the loan on Friday, marking its first co-financing venture with the newly established Asian Infrastructure Investment Bank (AIIB), which will provide another $100 million for the project. The AIIB board will decide on the loan later this month.
Britain’s Department for International Development (DFID) has also committed a $34 million grant for the project. The ADB will act as the lead financier and administer both the AIIB loan and the DFID grant.
“This is a historic milestone for ADB and AIIB as we jointly aim to meet the pressing infrastructure needs in Asia and Pacific region,” said ADB President Takehiko Nakao after the approval of the loan by the Board of Directors of the Manila-based lending agency.
He said that the project has strategic value to Pakistan as it supports north-south connectivity, new trade, and business opportunities, which will boost jobs and cut poverty. The project is also an integral part of the Central Asia Regional Economic Cooperation (CAREC) corridors.
The ADB and the AIIB have been preparing projects for co-financing since last year. Nakao and AIIB President Liqun Jin signed a memorandum of understanding for collaboration at the time of ADB’s annual meeting in Frankfurt, Germany, in early May.
The project constitutes a key part of the 1,800-kilometre CAREC transport corridor linking Karachi in the south, to major primary production and population centres, including Lahore, Faisalabad, Islamabad and Peshawar, and on to Torkham on the northern border with Afghanistan.
The M-4 Motorway will have four sections. The 58-kilometre Faisalabad-Gojra section has been opened for traffic. The project was completed by borrowing $170 million from the ADB. The Gojra-Shorkot section will be completed by November next year, the NHA chairman told diplomats on Thursday while briefing them on Pakistan’s infrastructure plans.
Once the M-4 is completed, it will link southern parts of Punjab with the north through already established networks of motorways. The M-4 Motorway will extend the already completed M-1, M-2 and M-3 motorways southward and shorten the distance between Multan and the twin cities of Islamabad-Rawalpindi.
Upon completion, the M-4 Motorway will provide a four-lane access controlled alternative to the existing narrow and congested routes notably in the heavily trafficked Faisalabad and Khanewal-Multan-Muzaffargrah areas.
M-4 is also a step towards positioning Pakistan as a transit artery for goods moving between Karachi and Torkham through the country’s major business and population centres.