Finance

Saudi Fund for Development contributes $240 million to build Mohmand Multipurpose Dam

Saudi Fund for Development contributes $240 million to build Mohmand Multipurpose Dam
(photo courtesy SFD)

The Saudi Fund for Development (SFD) has signed a US$240 million loan agreement to support Pakistan’s 800 MW Mohmand Multipurpose Dam Project, a hydropower complex that will contribute to Pakistan’s energy security, increase sustainable water supply for agriculture and human consumption, and improve resilience to floods.

The agreement was signed by the SFD Chief Executive Officer Sultan Abdulrahman Al-Marshad and the Federal Secretary for Ministry of Economic Affairs, Pakistan, Dr. Kazim Niaz.

The Mohmand Multipurpose Dam Project will enhance water and food security and improve the standard of living for people in the Khyber Pakhtunkhwa province, where almost 80% of the population resides in rural areas, boosting the region’s socioeconomic development by creating employment opportunities and reducing poverty levels.

Mohmand Dam is being constructed in District Mohmand of Khyber Pakhtunkhwa. The concrete-faced rockfill dam is designed to store about 1.2 million-acre feet of water and help mitigate floods. Besides supplementing 160,000 acres of land, about 18,237 acres of new land will also be irrigated. The Mohmand Dam Power House will provide low-cost and environment friendly hydroelectricity annually to the National Grid. In addition, 300 million gallons of water per day will be provided to Peshawar for drinking purposes. Annual benefits of the project have been estimated at PKR51.6 billion ($232.4 million). The project is scheduled to be completed in 2026.

This loan represents a strong partnership between Saudi Arabia and Pakistan in promoting sustainable development and achieving the Sustainable Development Goals, according to a release. The project aligns with SDG-2 (Food Security), SDG-6 (Clean Water), and SDG-7 (Clean Energy) and embodies SDG-17 (Partnerships for the Goals).

Dr. Niaz expressed his sincere appreciation and gratitude to the Kingdom of Saudi Arabia for its unwavering support towards the development sectors in Pakistan through the SFD. He recognized the significant contribution made toward financing the vital project and emphasized its importance in bringing about positive developmental impacts on Pakistan and its people. The use of renewable energy would enable sustainable energy as well as water sources, which would enhance water and food security.

The project — which is co-financed by SFD, OPEC, Islamic Development Bank, and the Kuwait Fund for Arab Economic Development — is expected to have a significant impact on Pakistan’s energy and water sectors.

During the signing ceremony, Al-Marshad emphasized the strong developmental ties between the Kingdom of Saudi Arabia and Islamic Republic of Pakistan. The CEO also emphasized that this initiative is an extension of SFD’s continued support for development projects and programs in Pakistan. To date, SFD has financed around 41 development projects and programs in Pakistan, amounting to about $1.4 billion.