20 March 2012: The World Bank has approved loans for hydropower development and irrigation systems in Pakistan totaling US$1.09 billion.

The US$840 million Tarbela IV Extension Hydropower Project will add power generation capacity of 1,410 megawatts, building on an existing dam, tunnel, roads and transmission lines, The project aim is to generate additional electricity in summer months when demand for electricity and river flows are high. As it builds on existing infrastructure this project does not affect new lands or require relocation of populations.

The US$250 million Punjab Irrigated Agriculture Productivity Improvement Program Project is aimed at getting maximum productivity out of irrigation water by replacing flood irrigation with modern irrigation methods like drip and sprinkler systems.

Tarbela IV Extension Hydropower Project includes US $400 million loan from the International Bank of Reconstruction and Development (IBRD). It is a fixed spread loan with a maturity of 21 years, including a grace period of 6 years. The remaining US$440 million of the Tarbela project and US$250 million for the Punjab project are credits from the International Development Association (IDA), which carry a 0.75% service charge, a 1.25 percent interest rate, have a 5 year grace period and a maturity of 25 years. [World Bank Press Release]