ADB provides loan for Balakot 300 MW hydropower project

By Staff Reporter
Saturday – May 22, 2021
ISLAMABAD: The economic affairs minister (EAM) Omar Ayub Khan and Khyber Pakhtunkhwa (KP) chief minister (CM) Mahmood Khan witnessed, on Friday, the signing of financing agreement of Balakot hydropower development project amounting to $300 million.

According to a press release, the loan agreement was signed by economic affairs division (EAD) secretary Noor Ahmed and Asian Development Bank (ADB) acting country director (A-CD) Cleo Kawawaki, in the federal capital.

The total cost of the project is $755 million out of which ADB has committed to provide $300 million while the Asian Infrastructure Investment Bank (AIIB) will provide $280 million.

For the project, ADB is providing financing at highly concessional rates that is London Interbank Offered Rate (LIBOR) [6-months] plus 0.5 percent per annum (currently 0.7 percent per annum) for a period of 27-years including a grace period of 7 years.

EAM Khan expressed that this run-of-river hydropower project will be constructed on Kunhar River in District Mansehra and generate 300 megawatt (MW) electricity.

Balakot hydropower project will not only help unleash 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 immense potential in solar, wind and hydel resources and have good opportunities for investments,” he added.

EAM Khan appreciated the ADB’s valuable support for financing this highly important project.

KP CM Khan reiterated that the KP government is working on development of hydropower potential of the province on fast track basis.

He mentioned that the Pakistan Tehreek-e-Insaf (PTI) regime was already making huge investments in development of various hydro sites in the KP province.

Balakot hydropower project will provide livelihood by providing more than 1,200 jobs during the construction of the project in KP province.

Once completed, this hydropower project will provide reliable and cheap energy to the national grid.

It will also improve provincial revenue 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 development of clean and renewable energy in line with the vision of prime minister (PM) Imran Khan,” KP CM Khan added.

ADB director general (DG) Eugene Zhukov assured of the bank’s continued support to help Pakistan diversify its energy sources, increase energy security through renewable and affordable energy mix and implement critical economic reforms.

The ADB DG thanked the EAM and reiterated ADB’s commitment to further strengthen and expand its partnership with Pakistan in the priority sector for socioeconomic development.

The energy and power department of the KP government will be the executing agency while Pakhtunkhwa Energy Department Organisation (PEDO) will be the implementing agency for the project which is expected to be commissioned by 2026.