ISLAMABAD: The Asain Development Bank will provide $ 300 million concessional loan to Pakistan for the 300 MW Balakot Hydropower Project.
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 (KP) Chief Minister (CM) 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 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.
Total cost of this project is $755 million out of which ADB has committed to provide $300 million, while AIIB will provide $280 million. For this project, ADB is providing financing at highly concessional rates such as LIBOR (6-month) and 0.5 per cent per annum, currently 0.7pc per annum, for a period of 27-years including a grace period of seven years.
Once completed, this hydropower project will provide reliable and cheap energy to the national grid. It will also improve provincial revenue streams for the provincial government and boost economic activities in the country.
The KP Energy and Power Department will be the executing agency while the Pakhtunkhwa Energy Department Organisation (PEDO) will be the implementing agency for the project which is expected to be commissioned by 2026.