The Asian development Bank has approved a $100 million loan for a stretch of highway in Pakistan, the first project it has agreed to co-finance alongside the Asian Infrastructure Investment Bank .
AIIB is set to provide another $100 million loan, pending board approval later this month, it said in a statement. The UK's Department for International Development (DFID) has also committed a $34 million grant for the project.
As the lead financier, ADB will administer both the AIIB loan and the DFID grant.
The project will fund a 64km-long four-lane section of the M4 National Motorway connecting Shorkot and Khanwai in Punjab province. It constitutes a key part of the 1,800km Central Asia Regional Economic Cooperation transport corridor that links the port city of Karachi in the south to major primary production and population centres including Lahore, Faisalabad, Islamabad and Peshawar. It goes on to Torkham on the northern border with Afghanistan.
“This is a historic milestone for ADB and AIIB as we jointly aim to meet the pressing infrastructure needs in Asia and the Pacific region,” said ADB president Takehiko Nakao.
“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.”
It is understood that AIIB's first projects also include a road project in Tajikistan and a ring road in Almaty, Kazakhstan. AIIB declined to comment.
Since its inception last year, AIIB has strived to form partnerships with various development banks across Asia, the latest one being a tie-up with the European Investment Bank . The World Bank is also expected to co-finance $1.2 billion worth of projects with the AIIB this year.