The Asian Infrastructure Investment Bank (AIIB) has approved a $235 million loan for the Lahore Wastewater Management Project to ensure a sustainable supply of clean water and reduce environmental damage caused by untreated sewage in the city.
Approved by the Beijing-based institution on Thursday, the financing will help the Lahore Water and Sanitation Agency (LWASA) enhance its institutional capacity, enabling it to deliver better services to residents and become a financially sustainable entity. The AIIB funding will be used to address Lahore’s twin challenges of inadequate access to safe water and the overflow of untreated wastewater.
The Punjab government had sought AIIB’s assistance for developing key infrastructure, including the diversion of water from the Banbawala Ravi Bedian Depalpur (BRBD) Canal and the construction of a new surface water treatment plant (SWTP). The project also targets reducing non-revenue water (NRW) from 45 percent to below 20 percent by replacing old, leaking pipes that cause water losses and wastewater infiltration.
Water Metering to Curb Overuse and Improve Billing Efficiency
Another major component of the AIIB-backed Lahore Wastewater Management Project is the installation of water meters across the city. Currently, around 90 percent of water connections are unmetered, leading to overuse and theft. The new system aims to achieve 100 percent metering, billing, and collection, with a target of at least 90 percent recovery.
The project will also improve water quality monitoring systems and laboratories, alongside providing specialized staff training for managing treatment facilities. Additionally, the government has requested AIIB’s technical assistance to develop a regulatory framework that supports public-private partnerships for infrastructure expansion and operations.
Lahore currently lacks a wastewater treatment facility, with all domestic and industrial sewage flowing directly into the River Ravi, estimated at about 640 million gallons per day. The river, which supplies up to 82 percent of the city’s groundwater, has become heavily polluted, causing severe health and environmental hazards.
This contamination has led to rising cases of waterborne diseases such as diarrhea, typhoid, and hepatitis. To address the crisis, LWASA has prepared a comprehensive plan for six wastewater treatment plants, three of which will be financed by the AIIB, while the remaining will seek support from other international financial institutions.