Islamabad: The World Bank has approved USD 1 billion in additional funding for the Dasu Hydropower Project (DHP) in Khyber Pakhtunkhwa's Upper Kohistan district in Pakistan, reported Dawn.

"The World Bank's Board of Executive Directors today approved USD 1 billion in a second round of additional financing for the Dasu Hydropower Stage I (DHP I) Project," the bank said in a press release last night.

It further stressed that the financing will support the expansion of hydropower electricity supply, along with other benefits.

"This financing will support the expansion of hydropower electricity supply, improve access to socio-economic services for local communities, and build the Water and Power Development Authority's (Wapda) capacity to prepare future hydropower projects," it added, according to Dawn.

"Pakistan's energy sector suffers from multiple challenges to achieving affordable, reliable, and sustainable energy," the statement cited World Bank Country Director for Pakistan Najy Benhassine.

Calling the Dasu project site "one of the best hydropower sites in the world and a game changer for the Pakistan energy sector", Benhassine asserted that "with a very small footprint, the DHP will contribute to 'greening' the energy sector and lowering the cost of electricity".

Rikard Liden, the task team leader for the project, stressed that the DHP-I was an essential project in Pakistan's efforts to reverse its dependence on fossil fuels and reach 60 per cent renewable energy by 2031, as reported by Dawn.

Moreover, this additional financing will potentially save Pakistan an estimated USD 1.8 billion annually by replacing imported fuels.

"The second additional financing will facilitate the expansion of electricity supply and potentially save Pakistan an estimated $1.8bn annually by replacing imported fuels, and offset around 5 million tons of carbon dioxide," the statement cited Liden as saying.

"The annual economic return of DHP-I is estimated to be around 28pc," the project leader added.

According to the World Bank, the Dasu project, upon completion, will have an installed capacity of 4,320-5,400 megawatts (MW), Dawn reported.

"The project is being built in stages. DHP-I has a capacity of 2,160MW and will generate 12,225 gigawatt hours (GWh) per year of low-cost renewable energy. The DHP-II will add 9,260-11,400GWh per year from the same dam," the statement said.

"Through this project adult literacy has increased by an estimated 30pc since 2012, boys' schooling increased by 16pc while girls' schooling has increased by 70pc during this period," the World Bank added in its statement.

The global bank's financing will also support ongoing socio-economic initiatives in Upper Kohistan, particularly in the areas of education, health, employment, and transport.

(With Inputs From International Agencies)