SFD signs $240m loan agreement to support Mohmand Dam project

ISLAMABAD: Pakistan and Saudi Arabia on Friday reached an agreement under which the Saudi Fund for Development (SFD) would provide $240 million to advance the multipurpose Mohmand Dam project.

The dam would significantly contribute to the country’s energy security, increase sustainable water supply for agriculture and human consumption as well as improve resilience against floods, the state news agency reported.

The agreement was signed by the Chief Executive Officer of SFD Sultan Abdulrahman Al-Marshad and the Federal Secretary Ministry of Economic Affairs Dr Kazim Niaz, whereas Saudi Ambassador to Pakistan Nawaf bin Said Al-Malki was also presented on occasion, said a press release.

This loan represents a strong partnership between Saudi Arabia and Pakistan in promoting sustainable development and achieving Sustainable Developments Goals.

The Mohmand Dam project will enhance water and food security besides improving the standard of living of the people of Khyber Pakhtunkhwa Province as about 80 percent of the population resides in rural areas.

The project, which will also help in boosting socioeconomic development by creating employment opportunities and reducing poverty levels in these areas, is aligned with SDG-2 (Food Security), SDG-6 (Clean Water), and SDG-7 (Clean Energy) and embodies SDG-17 (Partnerships for the Goals).

The project, which is co-financed by the Saudi Fund for Development, 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.

By using renewable energy sources, the project will generate about 800 MW of electricity, contributing to Pakistan’s energy security. In addition, the storage of 1.6 million acre-feet of water will support sustainable agricultural practices, enable irrigation of 6,773 hectares of new land, and increase the total cropping area from 1,517 hectares to 9,227 hectares in the province.

During the agreement signing ceremony, the CEO of SFD emphasized the strong developmental ties between Saudi Arabia and Pakistan and highlighted the significance of joint cooperation between development funds, as evidenced by this project.

He further emphasized that this initiative is an extension of SFD’s continued support for development projects and programs in Pakistan since its inception.

To date, the SFD has financed around 41 development projects and programs in Pakistan, amounting to approximately $1.4 billion, In addition, SFD has financed between 2019 and 2023, oil derivatives worth more than USD 5.4 billion, to support Pakistan’s economy, this comes as a continuation of the support provided by the Government of Saudi Arabia to the brotherly country Pakistan to build a sustainable economy.

Speaking on the occasion, Secretary EAD Dr Kazim 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 by the Kingdom towards financing the vital project and emphasized its importance in bringing about positive developmental impacts on Pakistan and its people.

He said that the use of renewable energy would enable sustainable energy as well as water sources, which would enhance water and food security. Dr. Niaz praised the Kingdom of Saudi Arabia’s development efforts through SFD since 1976, which have led to remarkable social growth and sustainable economic prosperity.

The SFD has also supported 76 development projects and programs in the energy sector in African and Asian countries since 1975, including 33 projects and programs in African countries, 42 projects and programs in Asian countries and one project in Latin America.

Additionally, the SFD has played an active role in supporting and developing renewable energy sector projects, which amounted to 35 projects in 23 developing countries.