Islamabad: The Public-Private Partnership Authority’s (P3A) Board of Directors authorised the signing of the Rs. 27.8 billion Sialkot-Kharian Motorway project on Friday.

Minister for Planning, Development, and Special Initiatives Asad Umar, who chaired the meeting, described the clearance under the first-of-its-kind novel transaction structure as a big breakthrough in development financing.

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“It is the first project employing novel financing structure using Viability Gap Fund,” the minister stated in a tweet (VGF). This will provide a significant new development funding tool.”

He said that the total value of development projects in the pipeline had surpassed Rs. 1 trillion. The board of P3A discussed approving the Public-Private Partnership (PPP) agreement for the public-private partnership development of the Sialkot-Kharian Motorway.

The board had already authorised the project’s transaction structure and bidding paperwork package, as well as the winning bidder’s proposal, at meetings held in March and June 2021, respectively.

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The project envisages the construction of a 69km green-field 4-lane toll road on a build-operate-transfer (BOT) basis, at a cost of Rs. 27.8 billion. The project is expected to be constructed in a period of 24 months following the achievement of the financial close.

The project is expected to supplement the existing Lahore-Sialkot and future Kharian-Rawalpindi Motorway to take the motorway network up to the city of Rawalpindi.

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