The French Government (through the French Development Agency) has released 18 M € to ERRA for the rural housing reconstruction of the earthquake affected areas. It is the first disbursement of a 40 million Euros financing agreement, which was signed on 15 November 2006.
During the International Donors Conference held on 19 November 2005 in Islamabad, the French Minister for Foreign Affairs, Mr. Philippe Douste-Balzy, pledged 80 million Euro ($ 94 million) in soft loan for reconstruction and rehabilitation of the earthquake affected areas. Half of this pledge - 40 million Euro ($ 47 million) - is earmarked for the rural housing sector. The French soft loan dedicated to the rural housing sector is implemented through the French Overseas Development Assistance financial institution - the French Development Agency (AFD).
The 40 million Euro housing component of the project focuses on the reconstruction and rehabilitation of individual houses in accordance with Para-seismic standards given by ERRA. These funds are retroceded by ERRA in the form of compensations to private persons to finance the reconstruction of their houses. The implementing agency ERRA is in-charge of carrying out the project.
This Rural Housing reconstruction Project has two components:
1. Compensation for reconstruction of destroyed or damaged houses on the basis of the general scheme adopted by the Pakistani authorities.
2. Support for project management by i) a provision which permits financing of occasional expert studies, the terms of reference will be defined as needed; ii) logistical support to the implementing Agency; iii) the establishment of a technical analysis laboratory in Muzaffarabad.
The French Government is currently identifying with the Pakistani Authorities, the sectors in which the second half of the French pledge (40 million Euros) could be used.