Pakistan, Kuwait sign $25 mln loan deal for Mohmand Dam Project

ISLAMABAD: Pakistan and the Kuwait Fund for Arab Economic Development (KFAED) signed a second loan agreement worth Kuwaiti Dinar 7.5 million (around US$25 million) to finance the Mohmand Dam Hydropower Project, aimed at boosting clean energy and water storage capacity.

A signing ceremony was held today at the Ministry of Economic Affairs to formalize the Second Loan Agreement amounting to Kuwaiti Dinar 7.5 million (approximately US$ 25 million) between the Government of the Islamic Republic of Pakistan and the Kuwait Fund for Arab Economic Development (KFAED) for the Mohmand Dam Hydropower Project.

The agreement was signed by Mr. Muhammad Humair Karim, Secretary, Ministry of Economic Affairs, on behalf of the Government of Pakistan. The ceremony was attended by Mr. Fahad Hesham H. A. S. Aldousari, Deputy Head of Mission, Embassy of the State of Kuwait; Senior officials from Ministry of Economic Affairs and WAPDA.

While speaking on the occasion, the Secretary, Ministry of Economic Affairs, expressed profound gratitude to the Government of the State of Kuwait and KFAED for their continued support to Pakistan’s development agenda. Mr. Karim stated that this concessional financing reflects the brotherly relations and enduring partnership between Pakistan and Kuwait. He appreciated the Kuwait Fund’s financial assistance in energy, water, and social sector projects, which are contributing significantly to Pakistan’s socio-economic development.

It was recalled that during the 5th Session of the Pakistan-Kuwait Joint Ministerial Commission held in May 2024, Pakistan had requested the Kuwait Fund for early signing of financing agreement for total of Kuwaiti Dinar 30 million (US$ 100 million) for the Mohmand Dam Hydropower Project, to be released in four equal tranches. Following the signing of the first loan agreement in June 2024, today’s signing marks the second phase of this commitment.

Mr. Karim informed that the project is progressing smoothly and that the disbursement under the second loan will further accelerate construction activities on this strategically important project, which aims to enhance water storage capacity, generate clean energy, drinking water supply to Peshawar city and strengthen flood control in Pakistan. He also emphasized the early signing of the third loan agreement and invited the Kuwait Fund to consider additional financing for other priority development projects in Pakistan.

Speaking at the ceremony, Mr. Fahad Hesham H. A. S. Aldousari, Deputy Head of Mission, Embassy of Kuwait, reaffirmed his Government’s commitment to furthering bilateral economic cooperation and assured KFAED’s continued support for Pakistan’s development initiatives.