| Projects mainly aim to support country’s green agenda in energy sector as well as ongoing efforts to counter adverse impacts of Covid-19 pandemic

ISLAMABAD   -  The Islamic Development Bank (IsDB) has approved $252.5 million of funding for two vital projects in Pakistan.

The projects mainly aim to support the country’s green agenda in the energy sector as well as the ongoing efforts to counter the adverse impacts of the COVID-19 pandemic.

Chaired by IsDB President and Chairman of the Board Dr Muhammad Al Jasser, the 343rd meeting of the Board of Executive Directors of the Bank, on December 18, 2021, gave the green light to allocation of $180 million to contribute to financing of the strategic “Mohmand Dam and Hydropower Project’’ in Khyber-Pakhtunkhwa (KP).

Once completed, Mohmand Dam will be the 5th highest Concrete-Face-Rock-Filled Dam (CFRFD) in the world and will add 800MW to the country’s installed hydropower capacity.

It will also provide sustainable clean potable water to 2 million residents in Peshawar city while boosting food security through vital support for irrigation and agricultural activities on 6,773 ha of new farmlands. “It is my pleasure to announce that, 18 December, the Board of Executive Directors of the Bank approved a $180 million financing to contribute to this strategic, multi-purpose, green, renewable energy project,” IsDB President Dr Muhammad Al Jasser stated.

“We take pride in working alongside our partners from the Arab Coordination Group as well as other partners to see this great green project launched in due time. This is a testimony to the continuity of the strong partnership between IsDB and Government of Pakistan, in alignment with the country’s priorities and our own commitments to allocate more funding to climate-friendly projects.”

To date, Pakistan’s energy sector has received the largest share of IsDB Group development interventions by absorbing 68.4% (about $9.3 billion) of the Group’s investments. Meantime, in a separate development on 13th December, the Islamic Development Bank also approved $72.5 million of funding to support Pakistan’s nationwide vaccination efforts in the face of the ongoing COVID-19 pandemic.

Under this approval, the country’s “IVAC COVID-19 Vaccine Support Project” – also co-funded by the World Bank and the Asian Development Bank - will receive $70 million from IsDB as well as $2.5 million from IsDB’s Islamic Solidarity Fund for Development (ISFD).

The funding will contribute to Pakistan’s government’s efforts to vaccinate 70% of the population eligible for vaccination aged 18 years and above, including health care and frontline workers and other priority groups. This comes in the framework of the second track (R2) of IsDB Group’s $4.56 billion Strategic Preparedness and Response Program (SPRP), specifically designed to support member countries with their health and economic recovery programs against the COVID-19 pandemic.

Meanwhile, Pakistan and IsDB have signed a financing agreement of $72.5 million for procurement of COVID-19 vaccine. Signing ceremony was held during the visit of Dr Muhammad Al-Jasser, President IsDB, to Pakistan. President, who is in Islamabad on a four-day visit to attend the 17th Extraordinary Session of the OIC on Afghanistan, called on Omar Ayub Khan, Federal Minister for Economic Affairs & Governor of the IsDB in the Ministry of Economic Affairs, Islamabad.

Both sides discussed the ongoing economic cooperation between Pakistan and IsDB. Pakistan is the founding member of the Bank. IsDB is an important multilateral development bank with 57-members. Pakistan is the 2nd largest beneficiary of the IsDB financing. Since its inception, IsDB has approved $13.6 billion financing for Pakistan. The IsDB’s financing for Pakistan is covering all the major sectors of economy such as energy, industry, agriculture, transport, health and financial services. The president, IsDB assured of strong commitment to further strengthening and expanding its partnership with Pakistan.

Dr Muhammad Al-Jasser reiterated that IsDB is one of the leading development partners of Pakistan and fully supports government of Pakistan’s development vision and priorities. He assured the minister that the bank will continue to mobilize more financial resources for developing infrastructure, uplifting social sector and achieving sustainable economic growth. It was also assured that IsDB will continue to leverage private financing to support trade needs including import of petroleum products.

The bank’s financing for procurement of COVID-19 vaccine will help to contain the spread of COVID pandemic. The president, IsDB further updated that the bank has also approved $180 million financing for Mohmand Dam Hydropower Project. Omar Ayub Khan, Minister for Economic Affairs, thanked the president, IsDB for visiting Islamabad and his continued support to Pakistan. He applauded IsDB’s role to support the member countries in COVID-19 response, recovery and procurement of vaccine and saving lives & livelihood amid pandemic. The minister also thanked the president, IsDB for his resolve to support financing needs of the country in future. He greatly appreciated IsDB’s support in green and clean energy development projects, like Mohmand Dam Hydropower Project, which will not only generate 800 MW electricity, but also enhance Pakistan’s water storage capacity by 1,293 million acre feet (MAF), create food security buffer, provide 13.32 cumec of clean drinking water to the residents of Peshawar city and will create more than 6,000 direct new employment opportunities for the local people. The minister for economic affairs appreciated the role and endeavors of president IsDB and his team for arranging this financing at a very challenging time.

The President, IsDB assured to further strengthen partnership between Islamic Republic of Pakistan and IsDB. It was also highlighted that IsDB doesn’t have regional office in Pakistan like in Turkey and some other member countries. During the discussions, minister for economic affairs underlined the need to have a regional office in Islamabad for better collaboration and engagement with the bank.