AfDB and Pakistan sign $ 300 million loan agreement for Balakot hydropower project
ISLAMABAD: Asain Development Bank will provide a concessional loan of $ 300 million to Pakistan for the 300 MW Balakot hydropower project.
AfDB Acting Country Director Cleo Kawawaki and Economic Affairs Division Secretary Noor Ahmed signed the loan agreement for the project, which was approved by the AfDB on March 30.
Economic Affairs Minister Omar Ayub Khan, Chief Minister (CM) of Khyber Pakhtunkhwa (KP) Mahmood Khan and AfDB Director General for Central and West Asia Yevgeniy Zhukov attended the inking of the agreement .
“As Pakistan’s main development partner in the energy sector, the AfDB supports Pakistan in its goal of developing its renewable energy resources and reducing its heavy dependence on fossil fuels,” Zhukov said.
“The hydroelectric project will play an important role in helping to advance this goal. The AfDB will continue to help Pakistan diversify its energy sources, implement essential reforms, increase energy security and increase the share of clean energy in its energy mix. “
The Balakot hydroelectric project will generate economic activity and improve the skills of local communities.
The total cost of this project is $ 755 million, of which the AfDB has committed to provide $ 300 million, while the AIIB will provide $ 280 million. For this project, the AfDB is providing financing at highly concessional rates such as LIBOR (6 months) and 0.5% per annum, currently 0.7% per annum, for a period of 27 years, including a period of seven year grace.
When completed, this hydroelectric project will provide reliable and inexpensive power to the national grid. It will also improve provincial revenue sources for the provincial government and stimulate economic activity in the country.
The KP Energy and Electricity Department will be the executing agency while the Pakhtunkhwa Energy Department Organization (PEDO) will be the executing agency of the project which is expected to be implemented. service by 2026.