Pakistan’s 128MW hydropower project gets €120 million loan from France

Islamabad: French Development Agency (AFD) will offer a soft loan to support the construction of a 128-megawatt hydropower plant that aims to increase the share of clean energy in Pakistan and improve the country’s energy security.

The credit facility agreement of €120 million (PKR 29 billion) to finance the Keyal Khwar hydropower project was signed by Secretary of Economic Affairs Division (EAD) Dr. Kazim Niaz, French Ambassador Nicolas Galey, and AFD country director Philippe Steinmetz in Islamabad.

“This soft loan will support the Water & Power Development Authority (WAPDA) - in its mandate of hydroelectricity sector development in Pakistan” according to the official statement. “The funding will also help enhance the competitiveness of renewable power generation. Such benefits will contribute to improving affordability and scaling up the energy supply” while also mitigating the impacts of power generation on climate and the environment, in line with the policies of the Government of Pakistan.

The 128-megawatt (MW) facility is located in the province of Khyber Pakhtunkhwa (KP) near the city of Pattan. The Keyal Khwar hydropower project will add 420 gigawatt-hours of clean energy annually to the country’s energy mix, harnessing the energy potential of a tributary of the Indus River.

The project will contribute to Pakistan’s strategy to develop green energy, and reduce greenhouse gas emissions, in line with the French Government’s agenda of promoting climate-friendly projects and with the French pledge and commitments announced at the International Conference on Climate Resilient Pakistan in Geneva on January 9, 2023.

Keyal Khwar is one of the five hydropower projects under construction in the country, according to WAPDA. This project comprises a medium-sized run-of-river hydropower plant with a small 1.5-hectare reservoir for daily regulation with a dam height of 38m. It is located on a tributary of the Indus River in northern Pakistan. The plant’s scheduled commissioning is expected in 2028. There’s huge untapped potential for hydro, wind, and solar energy in Pakistan. The country plans to increase its share of clean energy to 60% by 2030.