Asian Development Bank okays $300 million loan for Pakistan

The government will invest $175 million in the project. It has also requested a $280 million loan in project cofinancing from the Asian Infrastructure Investment Bank, said ADB

#ADBNEWS: ADB approved a $300 million loan to finance the construction of a 300-megawatt hydropower plant that will increase the share of clean energy in Pakistan & improve the country’s energy security.

The plant will add 1,143 gigawatt-hours of clean energy annually.

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— Asian Development Bank (@ADB_HQ) March 30, 2021

The plant will add 1,143 gigawatt-hours of clean energy annually to the country’s energy mix, enhancing the energy sector’s reliability and sustainability. The plant, which will incorporate seismic strengthening and climate-proofing measures, will be built on the Kunhar river near Balakot City in Khyber Pakhtunkhwa Province and commissioned by 2027.

“Pakistan is highly vulnerable to climate change, with water resources and energy particularly at risk from floods, droughts, high temperatures, and other extreme weather events,” said ADB Principal Energy Specialist Adnan Tareen. “In line with Pakistan’s climate change adaptation and mitigation priorities, this climate-resilient hydropower plant will boost the country’s clean energy generation while effectively utilizing its vast water resources.”

According to the statement issued by ADB, Pakistan is rich in hydropower resources but only around 16% of its identified hydropower potential has been harnessed. Balakot Hydropower Plant will also generate economic activity and improve the skills of local communities. During construction, the project will generate more than 1,200 jobs, about 40% of which will be sourced locally, and provide livelihood skills development for women.

A community development program will help to improve livelihood opportunities for affected households and adjacent communities, including women and vulnerable segments of the population. This will help to build economic resilience and improve the capacity of affected people to cope with climate change, natural disasters, and other risks, read the statement.

The plant will substantially increase the revenue of the state-owned Pakhtunkhwa Energy Development Organization, which is responsible for operating hydropower plants in Khyber Pakhtunkhwa. It will help reduce the average daily load shedding in the province and serve the national demand.