ISLAMABAD, April 08:The Saudi Fund for Development (SFD) has signed a $240 million loan agreement to finance the Mohmand dam project, a major hydropower complex that will contribute to Pakistan’s energy security, increase sustainable water supply for agriculture and human consumption as well as improve resilience to floods.
The agreement was signed by the SFD CEO Sultan Abdulrahman Al-Marshad and the Federal Secretary for Ministry of Economic Affairs Dr Kazim Niaz.
Ambassador of Saudi Arabia Nawaf bin Said Al-Malki witnessed the signing ceremony.
This loan will help bridge the financing gap and contribute in promoting and achieving the Sustainable Development Goals (SDGs), according to the Ministry of Economic Affairs.
The Mohmand multipurpose dam project will enhance water and food security, and improve the standard of living for the people of Khyber-Pakhtunkhwa, where almost 80% of the population resides in rural areas, boosting the region’s socioeconomic development by creating employment opportunities and reducing poverty levels.
The project aligns with sustainable development goals of ensuring food security, clean water, and clean energy.
The project, which is co-financed by the SFD, OPEC, Islamic Development Bank, and the Kuwait Fund for Arab Economic Development, is expected to have a significant impact on Pakistan’s energy and water sectors.
By using renewable energy sources, the project will generate 800MW of electricity, contributing to Pakistan’s energy security.
During the agreement signing ceremony, the SFD CEO emphasised the strong developmental ties between the Kingdom of Saudi Arabia and Pakistan.
The CEO also highlighted the significance of joint cooperation between development funds, as evidenced by this project. He further emphasised that this initiative was an extension of the SFD’s continued support for development projects and programmes in Pakistan since its inception.
The SFD financed around 41 development projects and programmes in Pakistan, amounting to approximately $1.4 billion.
In addition, the SFD financed oil derivatives worth more than $5.4 billion between 2019 and 2023 to support Pakistan’s economy. This came as a continuation of the support provided by the government of Saudi Arabia to the brotherly country Pakistan to build a sustainable economy, the ministry stated.
Niaz recognised the significant contribution made by the kingdom towards financing the vital project, emphasising its importance in bringing about positive developmental impacts on Pakistan and its people.
The use of renewable energy would enable sustainable energy as well as water sources, which would enhance water and food security.