ISLAMABAD: The Jeddah-based Islamic Development Bank (IsDB) on Monday signed framework agreements to extend $180 million loans to Pakistan to finance Mohmand Dam Hydropower Project (MDHP).

The financing agreements were signed by Secretary Economic Affairs Mian Asad Hayaud Din and Special Adviser to the President IsDB Mohammad Jamal Al-Satti.

The signing ceremony was also witnessed by IsDB President Dr Muhammad Al Jasser, who is in Islamabad on a three-day visit to attend the 48th session of the OIC Council of Foreign Ministers. Dr Al Jasser also had a meeting with Minister for Economic Affairs Omar Ayub Khan and discussed the matters of mutual interest, an official statement said.

Both sides discussed the ongoing and future economic cooperation between Pakistan and the IsDB and agreed to continue with the technical and financial assistance to Pakistan.

The two sides signed a total of three framework agreements for a cumulative amount of $180m to provide financing for Rs310bn worth MDHP. The contract for the project construction was awarded to a consortium of China Gezhouba Group Company (CGGC) and Descon Engineering of Prime Minister’s Adviser on Commerce Abdul Razak Dawood in 2019 and construction commenced in September 2019 with a completion deadline of December 2025.

MDHP is a multi-purpose concrete-faced rockfill dam being constructed on Swat River located at a distance of about 48km from Peshawar and 5km upstream of Munda Head Works in Mohmand District of Khyber Pakhtunkhwa. The project is to generate 1,300MW electricity and enhance Pakistan’s water storage capacity by 1,293-million acre-feet (MAF), provide food security buffer, 13.32 cubic of clean drinking water to the residents of Peshawar city and create more than 6,000 direct new employment opportunities for the local people.

Referring to the agreements, Dr Muhammad Al Jasser said 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, Water and Power Development Authority (Wapda) to develop a multi-purpose dam that will not only enhance energy and water supply but also the livelihoods of the local communities and better protect them against floods”.

The signing of the framework agreements for Mohmand Dam and Hydropower Plant project is testimony to the continuity of the strong partnership between Pakistan and IsDB Group, in alignment with the country’s priorities and our commitments to allocate more financing to climate-friendly projects, the ISDB chief said adding he looked forward to ensuring the smooth implementation of the project and hoped to witness its operation in due time.

Published in Dawn, March 22nd, 2022