PESHAWAR: Due to the steady decline of rupee against the US dollar, Khyber Pakhtunkhwa (KP) government has decided to borrow foreign loans in euros instead of dollars from the Asian Development Bank (ADB).
Daily Mashriq has reported that an agreement has also been reached with ADB and the bank has agreed to provide loans in euros for the largest urban development project of the province. The KP Local Government Department sources said that an agreement has been finalised under which the ADB was to provide $655 million for the cities Improvement Project. $400 million was requested for the second phase of the project.
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The Khyber Pakhtunkhwa government has so far received a total of $1.5 billion but due to the fall of rupee against dollars, it was extremely difficult for the government to repay the loan in dollar. Thus, the government has requested ADB to provide loan for the project in Euros instead of dollars, which the bank has approved.
For this purpose, the Economic Affairs Division has sent the Ministry of Law’s revised legal opinion on the loan agreement to the ADB and requested the bank to start the process of paying the loan of 529.50 million Euros. The PC-1 of the project has already been approved for the project and it has also completed the identification of sub-development projects, after which the process of disbursement of loan will begin.
The provincial government has approved PC-1 of Rs99 billion for the first phase of the urban development project, of which Rs94 billion will be paid by the ADB and Rs5 billion by the KP government.