Pakistan and Denmark have signed a concessional loan agreement for the construction of a large wastewater treatment plant (WWTP) in Faisalabad to meet urban environmental challenges.
The agreement was signed by Muhammad Humair Karim, secretary of the Ministry of Economic Affairs, and Tina Kullerup Hauser, Director General of Danida Sustainable Infrastructure Finance (DSIF).
The project, entitled “Construction of the eastern wastewater treatment plant (33 MGD) by Faisalabad City Phase-I”, will have a treatment capacity of 200,000 cubic meters per day. It aims to contribute to sustainable urban development by considerably improving wastewater treatment facilities in the city, thus supporting environmental protection, public health and resilient urban infrastructure.
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The project is financed by a concessional loan of DSIF, which offers very favorable terms to support sustainable infrastructure. These loans have a significant concessionalality – a generous measurement more generous than standard market loans – of 35%. This makes the terms of funding considerably softer and more affordable for Pakistan.
The signing demonstrates the government of Pakistan’s commitment to strengthen cooperation with development partners to meet urban challenges pressing
Denmark is the head of renewable energies and actively follows developments in the Pakistan energy sector.
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The DSI also prepares to finance 75% of a feasibility study for a wastewater treatment plant offered in Kattar Bund in Lahore.
Earlier in April, the two countries reaffirmed a $ 2 billion partnership to modernize Pakistan’s maritime infrastructure, improve port operations and promote sustainable practices during a meeting between the federal Minister of Maritime Affairs Junaid Anwar Chaudhry and the Danish ambassador Jakob Linulf.
This is the first intervention of the Denmark development sector in Pakistan after a long break. It is also the first loan finalized under the Pakistan-Denmark framework agreement, concluded in 2022.
The new wastewater factory in Faisalabad represents a concrete step in the growing collaboration of green infrastructure between the two nations.
