Pakistan and Denmark have signed a concessional loan agreement for the construction of a larger wastewater treatment plant (WWTP) in Faisalabad to tackle the city’s environmental challenges.
The agreement was signed by Muhammad Humair Karim, secretary of the Ministry of Economic Affairs, and Tina Kullerup Hausen, CEO of Danida Sustainable Infrastructure Finance (DSIF).
The project entitled “Construction of the Eastern Wastewater treatment plant (33 mgd) of Faisalabad City Phase-I” will have a treatment capacity of 200,000 cubic meters per year. Day. It aims to contribute to sustainable urban development through significant improvement of wastewater treatment facilities in the city, thereby supporting environmental protection, public health and elastic urban infrastructure.
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The project is financed through a concessional loan from DSIF, which offers very favorable conditions to support sustainable infrastructure. Such loans have significant concessionality – a measure of how much more generous they are than standard market loans – of 35%. This makes the financing conditions considerably softer and more affordable to Pakistan.
The signing demonstrates the Government of Pakistan’s obligation to strengthen cooperation with development partners to tackle urgent urban challenges
Denmark is the lead in renewable energy and actively follows the development in Pakistan’s energy sector. Danish Engineering companies and contractors who are known for their extensive expertise in the construction of water treatment plants – including those running on green energy – are expected to be involved in the project.
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DSIF is also preparing to finance 75% of a feasibility survey for a proposed wastewater treatment plant at Kattar Bottom in Lahore.
Earlier in April, both countries confirmed a $ 2 billion partnership to modernize Pakistan’s maritime infrastructure, improve the port’s operations and promote sustainable practice during a meeting between federal minister of maritime affairs Junaid Anwar Chaudhry and Danish ambassador Jakob Linulf.
It is Denmark’s first development sector intervention in Pakistan after a long hiatus. It is also the first loan that has been completed under the Pakistan-Denmark framework agreement, completed in 2022.
The new wastewater system in Faisalabad represents a concrete step in the growing collaboration collaboration between the two nations.
