The Asian Development Bank (ADB) and the government of Pakistan on Friday signed a $300 million loan to finance the construction of a 300-megawatt hydropower plant in Balakot, Khyber-Pakhtunkhwa province.
ADB Acting Country Director Cleo Kawawaki and Economic Affairs Division Secretary Noor Ahmed signed the loan agreement for the project, which was approved by the ADB on March 30.
Minister for Economic Affairs Omar Ayub Khan, Khyber-Pakhtunkhwa Chief Minister Mahmood Khan and ADB Director General for Central and West Asia Yevgeniy Zhukov witnessed the inking of the agreement.
“As Pakistan’s largest development partner in the energy sector, ADB has been supporting Pakistan as it aims to build its renewable energy resources and cut its heavy dependence on fossil fuels,” said Zhukov.
“The Balakot hydropower project will play an important role in helping to advance this objective. ADB will continue to support Pakistan to diversify its energy sources, implement critical reforms, increase energy security and grow the share of clean power in its energy mix.”
The Balakot hydropower project will generate economic activity and improve the skills of local communities.
During construction, the project will generate more than 1,200 jobs, about 40% of which will be sourced locally. A community development programme will help to improve livelihood opportunities for the affected households in the project surroundings.
Pakistan is rich in hydropower resources, but only around 16% of its identified hydropower potential has been harnessed. The country’s power sector is reliant on imported fuel-based power generation and is burdened with a stressed transmission and distribution network.
To balance the energy mix and reduce its dependence on imported fuel, the government is committed to increasing its untapped renewable energy potential in the areas of hydro, solar and wind.
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The project will help meet future national demand for clean and affordable energy and generate revenue for Khyber-Pakhtunkhwa. It is expected to be commissioned by 2027.
The ADB has helped Pakistan undertake wideranging energy sector reforms designed to boost generation, transmission and distribution capacity by rehabilitating the aging power infrastructure.
The ADB is also supporting energy efficiency initiatives and public and private sector led clean energy development projects.
The ADB is committed to a prosperous, inclusive, resilient and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members – 49 from the region.