Saudi development agency signs $100 million in loans with Pakistan for hydropower projects in Kashmir

Pakistan Prime Minister Shehbaz Sharif (second left), Saudi Fund for Development (SFD) CEO Sultan Al-Marshad (left), and the delegation are pictured after a meeting at the PM Office in Islamabad, Pakistan on March 22, 2024. (Government of Pakistan)
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Updated 22 March 2024
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Saudi development agency signs $100 million in loans with Pakistan for hydropower projects in Kashmir

  • The projects are expected to prevent deforestation in areas where people still rely on wood for energy
  • The two projects will generate 70 megawatts of electricity that will be transmitted to the national grid

ISLAMABAD: A visiting Saudi Fund for Development (SFD) delegation signed two loan agreements of about $100 million with Pakistan’s economic affairs ministry on Friday to finance two important hydropower projects in Azad Jammu and Kashmir (AJK).

The SFD is a Saudi government agency that provides development assistance and financial aid to developing countries in the form of loans and grants. It aims to support these countries in implementing projects that promote economic stability and growth, improve infrastructure and enhance living standards.

The SFD has also been instrumental in aiding Pakistan’s economy by depositing money in the country’s central bank to help boost its foreign exchange reserves. Additionally, it has funded various development projects in Pakistan, including infrastructure, education and health initiatives to contribute to the country’s socio-economic development.

The Saudi agency has now agreed to bankroll two hydropower projects in Azad Kashmir to support Pakistan’s efforts for energy sustainability and economic growth.

“To enhance development cooperation, #SFD CEO, H.E. Mr. Sultan Al-Marshad, signed today with Pakistan’s Secretary Ministry of Economic Affairs, H.E. Dr. Kazim Niaz, two development loan agreements to finance Shounter Hydropower Project worth $66 Million & Jagran-IV Hydropower Project worth $35 Million,” the SFD announced in a social media post.

Earlier, the delegation met Pakistan’s economic affairs minister Ahad Khan Cheema who witnessed the signing of the agreements.

According to a statement released by his office, the two projects “aim at harnessing the indigenously available hydropower potential and generating 70 MW hydropower which will be transmitted to national grid.”

“Moreover, it will help in eradicating the menace of deforestation by providing electricity as an alternative to the energy needs of the local communities, who hitherto are entirely dependent on forest wood,” it added, “and create economic opportunities for socioeconomic uplift of the people of AJK.”

Cheema also appreciated the role and support of SFD to Pakistan at a challenging time and emphasized further strengthening of ties in the future.

The top SFD official leading the delegation also assured the Saudi agency’s continued support to Pakistan.

Later, the SFD delegation met with Prime Minister Shehbaz Sharif who appreciated the support of the Saudi agency while highlighting the need to expedite the processing of new projects.


Bangladesh flag carrier to launch Dhaka–Karachi flights this month after over 13 years

Updated 08 January 2026
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Bangladesh flag carrier to launch Dhaka–Karachi flights this month after over 13 years

  • Inaugural flight scheduled to depart from Dhaka to Karachi on Jan, 29, says Biman Bangladesh Airlines spokesperson
  • Airline will operate two weekly flights from the Bangladeshi capital to Pakistan’s commercial hub on Thursdays and Saturdays

ISLAMABAD: Bangladesh’s flag carrier Biman Bangladesh Airlines has announced it will launch direct passenger flights between the cities of Dhaka and Karachi after over 13 years later this month, the airline said on Thursday, as both nations improve historically bitter ties.  

Biman will operate two weekly flights to Karachi, Pakistan’s largest city by population and its commercial hub, on Thursdays and Saturdays, the airline’s spokesperson Boshra Islam told Arab News. 

“Biman is launching its Karachi operations on Thursday, Jan. 29, 2026,” she said, adding that the inaugural flight is scheduled to depart from Dhaka at 8:00 p.m. local time and arrive in Karachi at 11:00 p.m. Pakistan time. 

Pakistan has granted Biman initial permission to operate the route for three months until Mar. 26, according to a spokesperson for the Pakistan Civil Aviation Authority. The approval would be extended later, the official said. 

The restoration of the airline’s flights to Pakistan marks a significant step in restoring direct air connectivity between the two South Asian nations. 

Pakistan and Bangladesh were part of the same country until 1971, when the latter split from the former after a bloody civil war and became the independent state of Bangladesh.  

Ties between both have improved significantly since 2024, after the fall of former Bangladesh PM Sheikh Hasina’s government due to a student-led uprising. Hasina was widely viewed in Pakistan as being close to India and openly critical of Islamabad.  

The resumption of passenger flights comes as aviation and trade links between the two countries begin to recover after decades of limited engagement.  

In November last year, state-owned Pakistan International Airlines (PIA) said it had signed a cargo agreement with Biman Bangladesh Airlines aimed at streamlining air freight operations and boosting bilateral trade.  

A PIA spokesperson said the airlines had entered into a Cargo Interline Special Agreement as part of PIA’s strategy to expand its cargo business and offer more competitive services to customers.  

Pakistan has stepped up efforts to rebuild relations with Bangladesh as ties between Dhaka and New Delhi remain strained over India’s decision to grant asylum to Hasina after she fled the country.  

In February last year, a cargo vessel sailed directly from Pakistan to Bangladesh for the first time in decades and successfully unloaded its containers, port officials said. 

The two countries signed six agreements in August 2025 covering areas such as visa exemptions for diplomatic and official passport holders, trade cooperation, media collaboration and cultural exchanges, officials said.