Saudi Arabia offers $100m for hydropower project

ISLAMABAD: Saudi Arabia signed an agreement with Pakistan on Thursday to provide a loan of $100 million for the Neelum-Jhelum hydropower project, and announced a grant of $100m for social sector particularly in health and education.

The loan as well as the grant will come from the Saudi Fund for Development, which is already co-financing the Neelum-Jhelum project with a loan of $81m.

The loan agreement was signed by Vice Chairman and Managing Director of Saudi Fund, Engineer Yousef Ibrahim al-Bassam and Secretary Economic Affairs Division Nargis Sethi on behalf of their respective governments.

Saudi Ambassador in Pakistan, Abdul Aziz Ibrahim Al-Ghadeer was also present at the signing ceremony.

The grant of $100m for social sectors was announced by Mr Yousef Ibrahim al-Bassam during the loan signing ceremony.

The Neelum-Jhelum hydropower project aims to meet the fast-growing energy requirements in Pakistan, and is expected to generate 969MW of electricity.

Prime Minister Mian Nawaz Sharif has already directed for completion of the project on fast-track basis.

The Neelum-Jhelum project has been estimated to complete at a total cost of Rs274 billion with a planned foreign funding of $1,585m, and according to the Economic Affairs Division, $1060m have been committed by various donors including IDB, Saudi Fund, OPEC Fund, Kuwait Fund and China Exim Bank.

However, there is still a financial gap of $475m, and Pakistan is currently negotiating with the Kuwait Fund for Development, Abu Dhabi Fund for Development,

Exim Bank of South Korea, China Exim Bank, and governments of Japan and Qatar to bridge this gap, according to EAD spokesperson.

Ms Nargis Sethi while welcoming the chief of Saudi Fund stated that the presence of Ambassador Abdul Aziz Ibrahim Al-Ghadeer at the signing ceremony reflects the magnitude of Pakistan’s relationship with Saudi Arabia.

She highlighted the present government’s development agenda and its serious endeavours to bring the socio-economic development by undertaking people oriented policies.

Speaking on the occasion, the Saudi Fund Managing Director expressed the commitment of the Saudi government for the progress and development of the people of Pakistan.

Secretary Water and Power, Saifullah Chattha, WAPDA Chairman Syed Raghib Abbas Shah, and Chief Executive of Neelum-Jhelum project, Lt-General (retd) Muhammad Zubair were also present at the signing ceremony