ISLAMABAD, APR 7: The Saudi Fund for Development (SFD) on Friday signed a $240 million loan agreement to support Pakistan’s energy transition via Mohmand Multipurpose Dam Project.

The project — which is co-financed by the SFD, OPEC, Islamic Development Bank, and the Kuwait Fund for Arab Economic Development — is expected to 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 SFD CEO Mr Sultan Abdulrahman Al-Marshad and Federal Secretary for Ministry of Economic Affairs Dr Kazim Niaz.

According to a statement from the Ministry of Economic Affairs, “the loan is aimed at promoting sustainable development in Pakistan and achieving the Sustainable Development Goals (SDGs)”.

The statement further said that the dam would prove to be of great assistance to the people of Khyber Pakhtunkhwa (KP).

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

“By using renewable energy sources,” the ministry stated, “the project will generate 800 MW of electricity production capacity, contributing to Pakistan’s energy security.

“In addition, the storage of 1.6 million meter cube 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, facilitating agricultural activities.”

During the agreement-signing ceremony, the SFD CEO emphasised the strong developmental ties between the Saudi Arab and Pakistan and highlighted the significance of joint cooperation between development funds.