World Bank Likely to Approve $240 Million Water Sanitation Project for Karachi Tomorrow

The World Bank’s Board of Executive Directors is likely to approve the “Second Karachi Water and Sewerage Services Improvement Project (KWSSIP-2)” worth $240 million on Thursday. The project aims to provide safely managed water and sanitation services in Karachi and increase Karachi Water and Sewerage Corporation (KWSC)’s financial and operational performance. Sources revealed that the board is scheduled to meet on Thursday where KWSSIP-2 will be taken on the agenda. The project scope consists of three components that contribute to the project development objective (PDO); (i) Component 1 – Capacity Building and Reform of KWSC; (ii) Component 2 – Safely Managed Water Supply and Sanitation Services; and (iii) Component 3 – Project Management and Studies. A fourth component – the Contingent Emergency Response Component (CERC), with zero allocation, will provide flexibility to the government of Sindh to reallocate funds to support emergency response activities in case of an eligible emergency. Component 1 – Capacity Building and Reform of KWSC ($14 million, of which IBRD $5.6 million, AIIB $5.6 million, government of Sindh $2.8 million): This component will finance capacity building and reform support activities to enable KWSC’s evolution into a well-functioning utility that is also resilient to climate change. Specifically, the component will finance: Component 2 –Safely Managed Water Supply and Sanitation Services ($958.56 million, of which IBRD $223.8 million, AIIB $223.8 million, ADB $50 million, government of Sindh (GoS) $191.9 million, private capital $269 million): The component will finance investments to enhance Karachi’s water supply and sanitation infrastructure, based on the priorities identified in the 2008 master plan (to be updated in 2024). The medium-term investment plan addresses five interlinked structural problems in Karachi’s water and sanitation system: a bulk water supply shortfall, a leaky water distribution network, an intermittent supply that does not meet drinking water quality standards, a lack of wastewater collection and treatment capacity, and persistent poor service levels, especially in Katchi Abadis. This component will finance investments including The component will also finance network expansion to areas of the city that are currently not covered. In addition, the component will finance a performance-based NRW reduction program to reduce both physical and commercial water losses. Component 3 – Project Management and Studies ($26.44 million– of which IBRD $10.58 million, AIIB $10.58 million, GoS $5.28 million): This component finances Component 4 – Contingent Emergency Response Component (CERC): Following an eligible management crisis or emergency, the Borrower may request the Bank to reallocate project funds to support emergency response and reconstruction.