Saudi Arabia has signed an agreement to finance a Pakistani dam project, worth over $240 million.
According to the Saudi Press Agency (SPA), the Mohmand Hydropower Dam Project on the Swat River in north-west Pakistan is to be funded through a “soft development loan.”
Financed by the Saudi Fund for Development (SFD), the project reportedly aims to enhance the supply of energy and water for agriculture and daily consumption, strengthen protection from flood risks, help produce clean energy, increase electricity production capacity, and store about 1.6 million cubic metres of water.
The agreement was signed in Islamabad by SFD’s CEO Sultan Abdulrahman al-Marshad and Pakistan’s Undersecretary of the Ministry of Economic Affairs, Dr Kazim Niaz, with Saudi ambassador to Pakistan Nawaf bin Saeed al-Malki also being present.
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Al-Marshad, according to SPA, stated that “This project is an extension of the support being provided by the Government of the Kingdom of Saudi Arabia through the Fund since its inception to finance vital and economic projects aimed at achieving growth in development support.”
The signing comes after Pakistan’s junior Finance Minister Aisha Ghaus Pasha told reporters on Thursday that Riyadh had assured the International Monetary Fund (IMF) that it will provide a $2 billion loan to Islamabad in a bid to help it avoid a default.
In what has been Pakistan’s worst economic crisis to date, the move has reportedly enabled the South Asian nation to be one step closer to the IMF bailout which it seeks.