Saudi fund provides $240 million for Pakistan’s hydropower dam project
The project is expected to significantly improve Pakistan’s energy and water needs
Islamabad: Saudi Arabia will provide a $240 million loan to co-finance Pakistan’s Mohmand multi-purpose dam project, a major hydro-power complex being built to improve the country’s energy security and water supply for agriculture and drinking purposes.
The loan agreement was signed by the SFD CEO Sultan Abdul Rahman Al Marshad, and Pakistan’s Federal Secretary for the Ministry of Economic Affairs, Pakistan, Dr Kazim Niaz. Saudi Ambassador to Pakistan, Nawaf bin Said Al Malki, also attended the ceremony. “This loan represents a strong partnership between Saudi Arabia and Pakistan in promoting sustainable development and achieving the SDGs” according to an official statement.
The project, which is co-financed by the Saudi Fund for Development (SFD), OPEC, Islamic Development Bank, and the Kuwait Fund for Arab Economic Development, is expected to significantly improve Pakistan’s energy and water needs.
The Mohmand multi-purpose dam project will improve water and food security and improve the living standard for people in the Khyber Pakhtunkhwa province, where almost 80% of the population resides in rural areas boosting the region’s socioeconomic development.
The project will utilize renewable energy sources to “generate 800 MW of electricity production capacity, contributing to Pakistan’s energy security” according to the Pakistan government. The water storage of 1.6 million cubic meters of water will support sustainable agricultural practices to enable the irrigation of 6,773 hectares of land and increase the total cropping area from 1,517 hectares to 9,227 hectares in the province, facilitating agricultural activities.
The SFD CEO Sultan Abdulrahman highlighted the significance of joint cooperation and said “This initiative is an extension of SFD’s continued support for development projects and programs in Pakistan”. The Saudi agency has financed 41 development projects and programs in Pakistan, amounting to approximately $1.4 billion, and has supported Pakistan’s economy by financing oil derivatives worth over $5.4 billion between 2019 and 2023.
Pakistan’s secretary Dr Kazim Niaz thanked Saudi Arabia for its “unwavering support towards the development sectors in Pakistan” through the SFD since 1976. Speaking about the hydropower project, he said: “The use of renewable energy would enable sustainable energy as well as water sources, which would enhance water and food security”.