The government has signed an agreement with the OPEC Fund for International Development for the provision of $72 million to the country for the Mohmand Dam Hydropower Project.
The project is a multi-purpose concrete faced rockfill dam constructed on Swat River located at a distance of about 48 km from Peshawar and 5 km upstream of Munda Headworks in Mohmand District of Khyber-Pakhtunkhwa.
In addition to generating 1,300 megawatts of electricity, it will enhance Pakistan’s water storage capacity by 1,293 million acre feet (MAF), provide food security buffer, supply 13.32 cubic of clean drinking water to the residents of
Peshawar and create more than 6,000 direct job opportunities for the local people.
Aftab Ahmad Khokhar, Ambassador of Pakistan in Vienna and Dr Abdul Hameed Al Khalifa, Director General, OPEC Fund for International Development signed the agreement on June 15, 2022 in Vienna, Austria. The pact was declared effective on July 27, 2022.
The project would be financed with the support of the Saudi Fund for Development, Kuwait Fund for Development, Islamic Development Bank (IDB), and OPEC Fund for International Development.
The Mohmand Dam Hydropower Project is expected to be completed by 2025.
The signing of the agreement also reflects the confidence of the international financial institutions on the future of Pakistan’s economy.
In March this year, the government had secured a $180 million loan from IDB for the project. However, it was still seeking over $500 million to bridge the financing gap.
IDB President Dr Muhammad Al Jasser had said back then that the bank took pride in working alongside its partners to support Pakistan in a strategic project of national importance.
“We are working with other partners from the Arab Coordination Group along with one of the most experienced authorities in Pakistan, Wapda, to develop a multi-purpose dam that will not only enhance energy and water supply but also improve the livelihoods of local communities and protect them against floods,” the bank president had added.
The total project cost as per approved PC-1 was Rs310 billion, including local funding of Rs238 billion.
However, at that time, the government needed foreign funding equivalent to $700 million and there was still a gap of about $520 million,
Pakistan had already signed a contract with a joint venture comprising CGGC and Descon in March 2019.
Then premier Imran Khan had performed the groundbreaking ceremony despite the fact that his government could not achieve financial close of the project.
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