Islamabad: Saudi Arabia signed a USD 240 million loan agreement with Pakistan on Friday to support the Mohmand Multipurpose Dam Project, according to a statement issued by the Ministry of Economic Affairs of Pakistan, Dawn reported.

The agreement was signed by Sultan Abdulrahman Al-Marshad, CEO, Saudi Fund for Development (SFD) and Kazim Niaz, Federal Secretary for the Ministry of Economic Affairs. Saudi Ambassador to Pakistan Nawaf bin Said Al-Malki was also present on the occasion.

The statement said this loan represents a strong partnership between Saudi Arabia and Pakistan in promoting sustainable development and achieving the sustainable development goals (SDGs), Dawn reported.

SFD granted USD 240 million loan to Pakistan for Mohmand Dam Project today in Islamabad.(Photo/Twitter: Economic Affairs Division, Government of Pakistan)

Mohmand Multipurpose Dam Project is a major hydropower complex that will contribute to Pakistan's energy security, increase sustainable water supply for agriculture and human consumption, and improve resilience to floods. Mohmand Dam is an under-construction multi-purpose concrete-faced rock-filled dam located on the Swat River near Pakistan's Peshawar.

The statement noted that the project is expected to enhance water and food security and improve the standard of living for people in Khyber Pakhtunkhwa, where almost 80 per cent of the population resides in rural areas, boosting the region's socioeconomic development by creating employment opportunities and reducing poverty levels, Dawn reported.

It added that by using renewable energy sources, the project will generate 800 MW of electricity production capacity, contributing to Pakistan's energy security. In addition, the storage of 1.6 million cubic meters 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.

Co-financed by the SFD, OPEC, Islamic Development Bank, and the Kuwait Fund for Arab Economic Development, the project aligns with SDG-2 (Food Security), SDG-6 (Clean Water), and SDG-7 (Clean Energy) and embodies SDG-17 (Partnerships for the Goals).

During the agreement signing ceremony, the CEO of SFD said this initiative is an extension of the fund's continued support for development projects and programmes in Pakistan since its inception. He also highlighted the significance of joint cooperation between development funds, as evidenced by this project, Dawn reported.

For his part, Niaz expressed his sincere appreciation and gratitude to the Kingdom of Saudi Arabia for its unwavering support towards the development sector in Pakistan through the SFD.