ISLAMABAD: Pakistan and Kuwait on Friday signed a second loan agreement for the Mohmand Dam hydropower project in Pakistan’s northwestern Khyber Pakhtunkhwa (KP) province, Pakistan’s Press Information Department said.
Pakistan’s strategy to enhance its energy infrastructure includes a move toward constructing hydropower facilities, supported by multiple international agreements to address the country’s energy requirements.
Many of these small-scale projects have been facilitated under the multibillion-dollar China-Pakistan Economic Corridor (CPEC), part of President Xi Jinping’s Belt and Road Initiative.
On Friday, Pakistan and the Kuwait Fund for Arab Economic Development (KFAED) signed the agreement at the Pakistani economic affairs ministry to formalize the loan amounting to 7.5 million Kuwaiti dinar ($25 million).
“This concessional financing reflects the brotherly relations and enduring partnership between Pakistan and Kuwait,” said Muhammad Humair Karim, secretary of the Pakistani economic affairs ministry.
Mohmand Dam is a comprehensive infrastructure project designed to generate approximately 2,862 GWH [gigawatt hours] of electricity annually with an installed capacity of 800 MW [megawatts], significantly reducing the existing energy supply gap, according to Pakistani state media.
Additionally, the dam will create an active storage reservoir with a capacity of about 1,594 million cubic meters, ensuring a reliable and sustained supply of irrigation water. The 213-meter structure will also play a critical role in flood control and provide essential flood protection.
Karim appreciated the Kuwaiti Fund’s financial assistance in energy, water, and social sector projects, which have been “contributing significantly to Pakistan’s socio-economic development.”
During the 5th session of the Pakistan-Kuwait Joint Ministerial Commission in May 2024, Pakistan had requested the Kuwaiti Fund for early signing of financing agreement for a total of 30 million Kuwaiti dinars ($100 million) for the Mohmand Dam project, which were to be released in four equal tranches. Following the signing of the first loan agreement in June 2024, Friday’s signing marked the second phase of this commitment.
“The project is progressing smoothly and that the disbursement under the second loan will further accelerate construction activities on this strategically important project, which aims to enhance water storage capacity, generate clean energy, drinking water supply to Peshawar city and strengthen flood control in Pakistan,” Karim said.
