ADB to provide $300m to Pakistan for 300MW hydropower plant near Balakot

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A logo of the Asian Development Bank. Photo: File

  • ADB says Pakistan government will invest $175 million in project
  • Lender says Islamabad has requested a $280 million loan in project co-financing from AIIB as well.
  • ADB says plant will be constructed on the Kunhar River near Khyber Pakhtunkhwa's Balakot and will be commissioned by 2027.


MANILA: The Asian Development Bank announced on Tuesday that it will be extending Pakistan a $300 million loan to finance the construction of a 300-megawatt hydropower plant near Balakot.

"The Asian Development Bank (ADB) has approved a $300 million loan to finance the construction of a 300-megawatt hydropower plant that will increase the share of clean energy in Pakistan and improve the country’s energy security," said the lender in a statement.

The Manila-based lending agency said the government will invest $175 million in the project. It also shared that Islamabad has requested a $280 million loan in project co-financing from the Asian Infrastructure Investment Bank (AIIB) as well.

The ADB said that the plant will add 1,143 gigawatt-hours of clean energy to Pakistan's energy mix and also improve the energy sector’s reliability and sustainability.

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The lender said that the plant will be constructed on the Kunhar River near Khyber Pakhtunkhwa's Balakot and will be commissioned by 2027. It also said that the plan will include seismic strengthening and climate-proofing measures.

The bank said that the plant will "generate economic activity and improve the skills of local communities".

"During construction, the project will generate more than 1,200 jobs, about 40% of which will be sourced locally, and provide livelihood skills development for women," said ADB.

The lender said the community development programme will help improve livelihood opportunities for the affected people of the area.

"This will help to build economic resilience and improve the capacity of affected people to cope with climate change, natural disasters, and other risks," said the ADB.

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The Manila-based bank forecasts that the project will "substantially increase the revenue" of the Pakhtunkhwa Energy Development Organisation. The entity oversees the operation of hydropower plants in Khyber Pakhtunkhwa.

"It will help reduce average daily load shedding in the province and serve the national demand," said the ADB.

“Pakistan is highly vulnerable to climate change, with water resources and energy particularly at risk from floods, droughts, high temperatures, and other extreme weather events,” said ADB Principal Energy Specialist Adnan Tareen.

The ADB official said that the project is in line with "Pakistan’s climate change adaptation and mitigation priorities". He added that the "climate-resilient hydropower plant" will improve Pakistan's "clean energy generation while effectively utilising its vast water resources".

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The Asian lender said that Pakistan is rich in hydropower resources but only around 16% of its identified hydropower potential has been harnessed.

"The country’s power sector is reliant on imported fuel-based power generation and is burdened with a stressed transmission and distribution network," said the lender. It said that the government has vowed to increase its untapped renewable energy potential in hydro, solar, and wind to balance the energy mix and reduce dependence on imported fuel.