Pakistan and Kuwait Sign Second Loan Agreement for Mohmand Dam Hydropower Project
A significant signing ceremony took place on Friday, marking the formalisation of the Second Loan Agreement worth Kuwaiti Dinar 7.5 million (approximately $25 million) between the Government of the Islamic Republic of Pakistan and the Kuwait Fund for Arab Economic Development (KFAED). This agreement is aimed at supporting the Mohmand Dam Hydropower Project, a crucial initiative for Pakistan’s energy and water infrastructure.
The agreement was signed by Muhammad Humair Karim, Secretary of the Ministry of Economic Affairs, representing the Government of Pakistan. The event was attended by Mr Fahad Hesham H A S Aldousari, Deputy Head of Mission at the Embassy of the State of Kuwait, along with senior officials from the Ministry of Economic Affairs and WAPDA.
Gratitude and Recognition of Partnership
During his speech at the ceremony, Karim expressed deep appreciation to the Government of the State of Kuwait and KFAED for their ongoing support to Pakistan’s development agenda. He highlighted that this concessional financing reflects the strong brotherly relations and long-standing partnership between the two nations. Karim also acknowledged the financial assistance provided by the Kuwait Fund in energy, water, and social sector projects, which have played a vital role in advancing Pakistan’s socio-economic growth.
He noted that the project is progressing smoothly and that the disbursement under the second loan will further speed up construction activities on this strategically important project. The Mohmand Dam Hydropower Project aims to enhance water storage capacity, generate clean energy, supply drinking water to Peshawar city, and strengthen flood control mechanisms across Pakistan.
Progress and Future Commitments
It was recalled that during the 5th Session of the Pakistan-Kuwait Joint Ministerial Commission held in May 2024, Pakistan had requested the Kuwait Fund for early signing of the financing agreement for a total of Kuwaiti Dinar 30 million ($100 million) for the Mohmand Dam Hydropower Project. The funds were to be released in four equal tranches. Following the signing of the first loan agreement in June 2024, the October 31, 2025 signing marks the second phase of this commitment.
Karim also emphasized the importance of securing the third loan agreement at an early stage and invited the Kuwait Fund to consider additional financing for other priority development projects in Pakistan.
Reaffirmation of Bilateral Cooperation
Mr Fahad Hesham H A S Aldousari, Deputy Head of Mission at the Embassy of Kuwait, reaffirmed his government’s commitment to enhancing bilateral economic cooperation. He assured continued support from KFAED for Pakistan’s development initiatives, highlighting the mutual benefits of such partnerships.
The Mohmand Dam Hydropower Project represents a critical step towards sustainable development and energy security for Pakistan. With the support of the Kuwait Fund, the project is set to deliver long-term benefits to the region, including improved water management, increased electricity generation, and better flood control measures.
As the project moves forward, it is expected to play a pivotal role in meeting the growing energy demands of the country while contributing to environmental sustainability. The collaboration between Pakistan and Kuwait underscores the value of international partnerships in driving progress and addressing global challenges.