The Asian Development Bank (ADB) is set to provide financing totaling $250 million for two projects aimed at strengthening the power sector’s transmission infrastructure, as informed by sources within the Economic Affairs Division (EAD).
One of the loans, amounting to $235 million, will entail the borrower paying interest to the ADB on the withdrawn and outstanding principal amount. The interest rate for each interest period will comprise the sum of SOFR (Secured Overnight Financing Rate), 0.60% as per loan regulations, and a maturity premium of 0.20%. Additionally, a commitment charge of 0.15% per annum will be applicable, accruing on the full loan amount.
The repayment period for this loan will span 25 years, inclusive of a five-year grace period. Repayments will be made through 40 variable semi-annual installments commencing on May 15, 2029, and concluding on November 15, 2048.
Under the terms specified by the EAD, the borrower will bear the exchange risk cost on an actual basis and repay the principal and interest amounts converted into Rupee equivalent by the State Bank of Pakistan. In the event of default by the National Transmission and Dispatch Company (NTDC), a penal interest rate of 2% per annum will be charged for the period of default. Additionally, all charges and fees payable to foreign lenders by the Government of Pakistan shall be borne by the borrower.
The second loan, amounting to $15 million, will carry an interest charge of 2% per annum during the grace period and thereafter on the withdrawn loan amount. Similar to the first loan, the repayment period will span 25 years, including a five-year grace period, with repayments made through 40 variable semi-annual installments commencing on May 15, 2029, and ending on November 15, 2048.
