Japan Bank for International Cooperation (JBIC) signed an ODA loan agreement totalling ¥82.04bn for the Pahang-Selangor Raw Water Transfer Project in Malaysia.
The project consists of developing water resources in Pahang State, located in the eastern Malay Peninsula, and construction of a 45km water transfer tunnel to transport water to neighbouring Selangor State, thereby enabling a stable supply of water in Selangor State and the Federal Territory of Kuala Lumpur. The proceeds of the loan will be used for the construction of the water transfer tunnel, the dam, related works and the consulting services (including detailed design and implementation supervision).
Selangor State and the capital city of Kuala Lumpur (Federal Territory), which is located within this state, have a population of 4.73mn (as of 2000, which accounts for 20% of the country’s total population) and constitute the centre of the country’s politics and economy. Water consumption in this region has been rising in parallel with economic and population growth.
However, it is projected that the existing water resources, even if including those envisaged in the water resource development plan, will be unable to ensure adequate an water supply. Therefore, it is an urgent issue to have access to water resources outside the state to meet rising demand for water. In 1998, a drought that broke out in the state lasted about half a year, prompting Japanese affiliates operating in this region to file a request with the government of Malaysia for drought prevention measures, such as this current project. Thus, stable water supply remains one of the challenges to economic development in the region and the well-being of its population. This project is expected to address this challenge.
This is the first ODA loan JBIC has provided in five years since March 2000. JBIC will continue to support Malaysia, in particular, in improving the environment, reducing income disparities, and developing human resources for these purposes.