The Government of Pakistan and Islamic Development Bank (IsDB) on Monday signed framework agreements amounting to $180 million for Mohmand Dam Hydropower Project (MDHP).

Dr Muhammad Al Jasser, president, Islamic Development Bank (IsDB), Jeddah, Kingdom of Saudi Arabia called on Omar Ayub Khan, Minister for Economic Affairs and discussed the matters of mutual interest.

Both sides discussed the ongoing and future economic cooperation between Pakistan and IsDB and agreed to continue with the technical and financial assistance to Pakistan.

Dr Al Jasser is in Islamabad on a three-day visit to attend the 48th Session of the OIC Council of Foreign Ministers. During the meeting, Economic Affairs Division, Government of Pakistan and IsDB signed three Framework Agreements for a cumulative amount of $ 180 million in order to provide financing for the MDHP.

The financing agreements were signed by Mian Asad Hayaud Din, secretary Economic Affairs Division and Mohammad Jamal Al Satti, special adviser to the president IsDB. The signing ceremony was witnessed by Dr Al Jasser and Omar Ayub Khan, Minister for Economic Affairs.

The representatives of Ministry of Water Resources and Water and Power Development Authority (WAPDA) were also present.

MDHP is a multi-purpose Concrete Faced Rockfill Dam being constructed on Swat River located at a distance of about 48km from Peshawar and 5km upstream of Munda Head Works in Mohmand District of Khyber-Pakhtunkhwa, which in addition to generate 1,300 MW electricity, will enhance Pakistan’s water storage capacity by 1,293-million-acre feet (MAF), provide a food security buffer, besides supplying 13.32 million cubic feet of clean drinking water to the residents of Peshawar city and creating more than 6,000 direct new employment opportunities for the local people.

Referring to the agreements, Dr Al Jasser on the occasion stated that “The Bank takes pride in working alongside its partners to support Pakistan in a strategic project of national importance. We are working with other partners from the Arab Coordination Group along with one of the most experienced authorities in Pakistan, WAPDA to develop a multi-purpose dam that will not only enhance energy and water supply but also the livelihoods of the local communities and better protect them against floods.

The signing of the framework agreements for Mohmand Dam and Hydropower Plant project is testimony to the continuity of the strong partnership between Pakistan and IsDB Group, in alignment with the country’s priorities and our own commitments to allocate more financing to climate-friendly projects. We are looking forward to ensuring the smooth implementation of the project and we hope to witness its operation in due time.”

Omar Ayub Khan recognised the bank’s long standing and trusted partnership with Pakistan since its inception and its cumulative financing of $14.5 billion in diverse sectors such as energy, finance, transportation, education, and health.

He further acknowledged IsDB’s co-financing amounting to US$ 180 million for MDHP, which would significantly enhance Pakistan’s electricity generation and water storage capacity, and create new direct and indirect employment opportunities, generally in the Khyber-Pakhtunkhwa province and especially in the local area of the project site.

The minister deeply commended the role and endeavours of Dr Al Jasser and his team for arranging this financing at a very challenging time. This agreement will further strengthen partnership between the Pakistan and the bank, the minister added.

The story was originally published in Business Recorder on March 22, 2022.