The Asian Development Bank (ADB) announced on Tuesday that it will give Pakistan a $300 million loan to finance the construction of a 300-megawatt hydropower plant near Balakot.
“The ADB has 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 and improve the country’s energy security,” said the official statement.
This project will also help in improving the energy sector’s reliability and sustainability as it will provide 1,143 gigawatt-hours of clean energy.
The Manila-based lending agency said the government will invest $175 million in the project. It also shared that Islamabad has requested a $280 million loan in project co-financing from the Asian Infrastructure Investment Bank (AIIB) as well.
The plant will be constructed on the Kunhar River near Khyber Pakhtunkhwa’s Balakot and will be commissioned by 2027, said the lender.
“It will help reduce average daily load shedding in the province and serve the national demand,” said the ADB.
“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.
The bank said that the plant will “generate economic activity and improve the skills of local communities”. During construction, the project will generate more than 1,200 jobs, about 40 per cent of which will be sourced locally, and provide basic skill development for women.