88659
                                 Islamic Republic of Pakistan

                          Dasu Hydropower Stage I Project (DHP-I)

                                       Chair Summary*

                                         June 10, 2014

     The Executive Directors approved the credit for the Dasu Hydropower Stage I Project
(IDA/R2014-0187) for the Islamic Republic of Pakistan in the amount of SDR379.73 million
(US$588.4 million equivalent); and a proposed IDA partial credit guarantee in the amount of
US$460 million on the terms and conditions set out in the President’s Memorandum. The
Executive Directors also approved the request for a waiver of the World Bank’s Operational
Policy 14.25 on Guarantees, paragraph 3, for this Project.

      Directors expressed strong support for the Dasu Hydropower Stage I Project, as part of
Pakistan’s transformative energy initiative to address its energy deficit and expand electricity
supply in a sustainable and affordable manner. In this regard, they welcomed the shift away
from thermal generation towards low-carbon, least-cost renewable hydropower generation.

      Directors encouraged the World Bank Group to support the Government’s efforts to
harness the hydropower resources of the country and develop the “Indus River Cascade.” They
noted that this would require careful planning, capacity building and implementation support for
projects with high economic returns so that they meet the Bank’s safeguard standards, as well as
the aspiration of stakeholders. Directors encouraged attention to efficiency and transparency in
procurement and financial management, as well as implementation of social and environmental
management plans, taking into account stakeholder concerns.

     Directors appreciated the proposed sequenced financing strategy and the innovative use of
IDA guarantees for such a large investment, noting that it could provide a model for
development of such large infrastructure projects in future. In this context, they highlighted the
importance of leveraging critical commercial financing in the future. Finally, Directors urged
the Government to maintain its momentum of reform in the energy sector and asked
Management to closely monitor implementation.




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*This summary is not an approved record.