The Islamic Development Bank (IDB) has approved $252 million loans to Pakistan for two projects — the construction of Mohmand Dam in Khyber Pakhtunkhwa and for anti-Covid vaccine support in the country.
The approval from the bank’s board of directors was conveyed by IDB President Dr Muhammad Sulaiman Al-Jasser to Minister for Economic Affairs Omar Ayub Khan at a meeting in Islamabad, the ministry said on Monday.
A financing agreement of $72.5m for obtaining Covid-19 vaccines was signed by the Jeddah-based bank and the economics ministry. Dr Al-Jasser updated the minister that the bank has also approved $180m financing for Mohmand Dam Hydropower Project.
Dr Al-Jasser is also the chairman of IDB’s board of directors and is currently in Islamabad on a four-day visit to attend 17th Extraordinary session of the Organisation of Islamic Conference’s Council of Foreign Ministers to discuss the humanitarian situation in Afghanistan.
The two projects are aimed at supporting 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. Both sides also discussed the ongoing economic cooperation between Pakistan and IDB.
Dr Al-Jasser said his bank was one of the leading development partners of Pakistan and would continue to mobilise more financial resources for developing infrastructure, uplifting the social sector and achieving sustainable economic growth. He assured that the IDB would continue to leverage private financing to support trade needs, including the import of petroleum products.
Pakistan is the founding member of the IDB, an important multilateral development bank with 57 member countries. Pakistan is one of the top-three largest beneficiaries of the bank’s financing. Since its inception, the bank has approved $13.6 billion financing for the country, covering all the major sectors of the economy such as energy, industry, agriculture, transport, health and financial services.
Minister for Economic Affairs Omar Ayub thanked the IDB president for visiting Islamabad and his continued support to Pakistan and welcomed the bank’s role to support member countries in Covid-19 response, recovery and the procurement of vaccine and saving lives and livelihood amid the pandemic.
The minister also thanked Dr Al-Jasser for his resolve to support the financing needs of the country in future. He said Pakistan appreciated IDB’s support in green and clean energy development projects, including the Mohmand Dam Hydropower Project, which will not only generate 800 megawatts of electricity but also increase the country’s water storage capacity by 1,293m acre-feet.
The project is also expected to create a food security buffer, provide 13.32 cubic metres per second of clean drinking water to Peshawar’s residents and create more than 6,000 direct jobs for the local people.
Mohmand Dam is the world’s fifth-highest concrete-face rockfill dam — a type of dam widely used in hydropower projects. Construction work on the project started two years ago and is under way at 13 sites simultaneously, including diversion tunnels, power intake and power waterway, spillway, re-regulation pond, left bank irrigation tunnel, switchyard, powerhouse, main dam abutment, access roads, and project colony.
As of now, Pakistan’s energy sector has received the largest share of IDB Group development interventions by absorbing 68.4 per cent (about $9.3bn) of the group’s investments. The $72.5m of funding to support is for Pakistan’s International Vaccine Access Centre Covid-19 project — also co-funded by the World Bank and the Asian Development Bank.
The funding will contribute to the government’s efforts to vaccinate 70pc 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 of IDB Group’s $4.56bn Strategic Preparedness and Response Program, specifically designed to support member countries with their health and economic recovery programmes against the Covid-19 pandemic.
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