[Economics] Saudi Arabia lends Pakistan 240 million dollars to finance an energy project

[Guest High King Eslam]

Saudi Arabia and Pakistan said in statements Friday that the kingdom will provide a $240 million loan to finance the multi-purpose Mohmand Dam project, a major hydroelectric power complex being built in northwest Pakistan.

Pakistan's Ministry of Economic Affairs said in a statement that the project "will contribute to enhancing Pakistan's energy security, increasing sustainable water supplies for agriculture and human consumption, and strengthening resilience to floods."

And the two statements stated: “The Saudi Fund for Development signed a development agreement to finance the Mohmand Hydroelectric Power Dam Project through a soft development loan worth more than $240 million.”

For Pakistan, the financing will help boost very low foreign exchange reserves at a time when the country is facing an acute balance of payments crisis, and will help meet the energy needs of the country of 220 million people.

The ministry stated that the project will use renewable energy sources to generate 800 megawatts of electric power, which will contribute to enhancing water and food security for Pakistan.

The Saudi Fund for Development finances the project jointly with the OPEC Fund for International Development, the Islamic Development Bank and the Kuwait Fund for Arab Economic Development.

The agreement stated that storing water will support sustainable methods of agriculture, which will enable the country to irrigate 6,773 hectares of new agricultural land and increase the current crop area from 1,517 to 9,227 hectares in northwest Pakistan.

The two statements stated that the fund has financed about 41 projects and development programs valued at about $1.4 billion, in addition to financing oil derivatives worth more than $5.4 billion over the past four years to support the Pakistani economy.

Pakistan has the ability to generate a mixture of thermal and hydropower, which is sufficient in theory, but the country does not have enough funds to fully utilize its capacity, which leads to long hours of power outages, especially when energy demand increases in the summer.

Source: Sky News Arabia

https://www.i3lam-al3arab.com/السعودية-تقرض-باكستان-240-مليون-دولار-لت/