Saudi provides $240 mln for Pakistan hydro-power dam

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    Saudi provides $240 mln for Pakistan hydro-power dam

    ISLAMABAD (Reuters) – Saudi Arabia will co-finance Pakistan’s multi-purpose Mohmand Dam project. This is a major hydro-power plant being built in the northwest of Pakistan, according to statements from both sides.

    According to Pakistan’s economic affairs ministry, the project will “contribute towards Pakistan’s energy security and increase sustainable water supply for agriculture as well as human consumption and improve resilience against floods.”

    The same statement was made in Arabic by the Saudi state news agency.

    According to statements, “The Saudi Fund for Development has signed a $240 Million loan agreement.”

    The funding will be a boost to Pakistan’s foreign exchange reserves, which are already very low as the country is facing an acute balance-of-payment crisis. It will also help to address the energy requirements of the nation of 220-million.

    The project was co-financed by the SFD and the Organization of the Petroleum Exporting Countries (OPEC), the Islamic Development Bank and the Kuwait Fund for Arab Economic Development. It will use renewable resources to generate 800 megawatts of electricity production capacity, which will contribute to Pakistan’s energy security, the ministry stated.

    The agreement stated that the water storage will also be used to support sustainable agricultural practices. It will allow irrigation of 6,773 hectares and increase the total area of cropping from 1,517 to 9,227 in the northwestern region.

    According to statements, the SFD has funded around 41 development programmes and programmes in Pakistan, totaling approximately $1.4 Billion. It also added that it has also financed oil derivatives valued at more than $5.4 Billion between 2019 and 2023 to help support Pakistan’s economy.

    Although Pakistan has a mix mainly of thermal and hydro power generation capacities, it does not have sufficient funds to fully utilize the capacity. This has led to hours-long blackouts, especially in summer when energy demand is high.

    Reporting by Asif Shahzad, Islamabad; Additional reporting by Claudia Tanios, Dubai; Editing and proofreading by Jason Neely & Barbara Lewis

    Our Standards: The Thomson Reuters Trust Principles.

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