ISLAMABAD: Pakistan and Asian Development Bank (ADB) have signed the $300 million financing agreement of the Balakot hydropower development project.
The loan agreement was signed by Economic Affairs Division (EAD) Secretary Noor Ahmed and ADB Acting Country Director Ms Cleo Kawawaki which was witnessed by Minister for Economic Affairs Omar Ayub Khan and Khyber Pakhtunkhwa (KP) Chief Minister Mahmood Khan.
The total cost of the Balakot hydropower development project is US$ 755 million out of which ADB has committed to providing $300 million while the Asian Infrastructure Investment Bank (AIIB) will finance $280 million. According to the spokesperson, ADB is providing financing at highly concessional rates (LIBOR six-month + 0.5% per annum – currently 0.7% per annum) for the project for a period of 27 years including a grace period of seven years.
Omar Ayub Khan, while speaking on the occasion, said that the run-of-river hydropower project will be constructed on the Kunhar River in the Mansehra district and generate 300 megawatts of electricity.
Balakot power project will not only help unleash the hydropower potential of the country but also improve energy security by increasing clean and affordable energy share in the country’s energy mix. “The government is working on renewable energy policy to harness the immense potential in solar, wind and hydel resources and have good opportunities for investments”, he added. The minister appreciated ADB’s valuable support for financing the highly important project.
KP CM Mahmood Khan reiterated that the provincial government is working on the development of the hydropower potential of the province on fast track basis.
He mentioned that the Pakistan Tehreek-e-Insaf-led government was already making huge investments in the development of various hydro sites. He added that the Balakot hydropower project will provide livelihood by providing more than 1,200 jobs during the construction. “Once completed, this hydropower project will provide reliable and cheap energy to the national grid. It will also improve provincial revenues streams for the provincial government and boost economic activities in the country.”
“This project shows the strong commitment of PTI government to address the challenges of climate change through the development of clean and renewable energy in line with the vision of Prime Minister Imran Khan”, added the chief minister.
ADB Director General Eugene Zhukov assured of continued support to help Pakistan diversify its energy sources, increase energy security through renewable and affordable energy mix and implement critical economic reforms.
He thanked Omar Ayub Khan and reiterated ADB’s commitment to further strengthen and expand its partnership with Pakistan in the priority sector for the socio-economic development of the country.
The KP government’s Energy and Power Department will be the executing agency while Pakhtunkhwa Energy Department Organization (PEDO) will be implementing agency for the project which is expected to be commissioned by 2026.