Contacts:
In Islamabad: Shahzad Sharjeel, (92-51) 2279641
email: ssharjeel@worldbank.org
In Washington: Erik Nora, (202) 458 4735
email: enora@worldbank.org WASHINGTON, December 15, 2005—The World Bank approved today a US$400 million Emergency Recovery Credit (ERC) to further support the earthquake recovery and reconstruction effort in Pakistan over a three-year period. The project will support the Government of Pakistan’s efforts to reduce the immediate suffering and restore livelihoods; reconstruct housing; and help finance needed imports. This follows the Bank’s initial commitment of US$475 million in October as part of the institution’s overall pledge of US$1 billion for earthquake recovery.
The credit will support housing reconstruction (US$220 million), livelihood support (US$85 million), import financing (US$85 million), and capacity building (US$10 million), and also can make funds available for any financing gaps identified in other sectors such as social protection, health, education, agriculture, roads, water supply, and other infrastructure.
The 2005 earthquake is arguably the most devastating natural disaster in Pakistan’s history. According to Government of Pakistan figures, as of November 3, around 73,000 people had died and more than 70,000 had been severely injured or disabled. Over 2.8 million persons have been left without shelter, and it is estimated that about 2.3 million persons are without adequate food.
“Earthquakes make things fall apart. This credit will allow people to put their lives and homes back together,” says John Wall, World Bank Country Director for Pakistan. “Poor people living in inaccessible mountain areas have borne the brunt of the earthquake’s impact. They are now struggling to rebuild their lives after losing not only family members and loved ones, but also their homes, assets, and work. This project will support these people rebuilding their houses and restore their livelihoods through income transfers.”
Wall added that the total package of assistance will help rebuild communities along with agriculture, transport and basic services; and support the resumption of livelihoods in the most remote and poorest earthquake-affected districts.
In addition to the enormous human toll, the cost of the earthquake and its aftermath will present Pakistan with an enormous financial challenge. According to the Preliminary Damage and Needs Assessment prepared jointly by the World Bank and Asian Development Bank, the overall cost associated with the earthquake is estimated at around US$5.2 billion, which includes estimated costs for relief, livelihood support for victims, and reconstruction.
“The post-earthquake reconstruction may take years and the Bank will be a partner until the job is done,” said Praful Patel, World Bank Vice President for South Asia Region. “As the reconstruction effort continues, it is critical that Pakistan strengthen its efforts to reduce future disaster risks. The capacity building component of this operation supports Pakistan’s efforts to develop a strategic approach to hazard risk management.”
The credit, from the International Development Association (IDA), the World Bank’s concessionary lending arm, carries a 0.75% service fee, a 10-year grace period, and a maturity of 35 years. |
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