Pakistan, Denmark Sign Loan Deal for Faisalabad WWTP

Pakistan and Denmark have signed a concessional loan agreement for the construction of the Wastewater Treatment Plant in Faisalabad, marking a major step in sustainable urban infrastructure development. The agreement was signed by Muhammad Humair Karim Kidwai, Secretary of the Ministry of Economic Affairs, and Tina Kollerup Hansen, Managing Director of Danida Sustainable Infrastructure Finance (DSIF).

The plant, designed with a treatment capacity of 200,000 cubic meters per day, will serve as a critical project under Phase-I of Faisalabad City’s wastewater management plan. It aims to improve wastewater treatment, protect the environment, and enhance public health standards in one of Pakistan’s busiest urban centers.

The project is financed through DSIF on highly concessional terms, carrying a 35% grant element, making it more affordable than standard market loans. Danish engineering firms and contractors, experienced in renewable-powered treatment systems, are expected to be key partners in the project. DSIF is also planning to co-finance a feasibility study for another wastewater facility in Lahore.

This is Denmark’s first development sector loan in Pakistan under the 2022 Framework Agreement and reflects the growing collaboration between both nations in green infrastructure. Officials say the project will also support sustainable growth and resilient urban development.