Saudi Arabia has approved a funding of 901 million Saudi Riyal (Rs34 billion) for the construction of Mohmand Hydropower Dam, national media outlets reported quoting Kingdom’s Ambassador to Pakistan Nawaf Bin Said Al-Maliki on Wednesday.
According to an official statement issued by the ministry, Saudi Arabia Ambassador to Pakistan Nawaf Bin Said Al-Maliki met the Federal Minister for Economic Affairs, Omar Ayub Khan Wednesday.
Besides this, the meeting also had a discussion on the success of Prime Minister Imran Khan.
He said that funding of 901 million Saudi Riyal was approved for the construction of Mohmand Dam from the Saudi Development Fund. “The funding is for 25 years, and an interest rate of two percent will be charged on it,” said the envoy of Saudi Arabia.
Omar Ayub assured the Saudi envoy Nawaf Bin Said Al-Maliki of the early utilization of funds so that the construction of the project could be expedited. “Our government is focusing on environment-friendly and affordable energy through the development of solar, wind, and hydel resources”, he said.
The statement read, “Minister for Economic Affairs highlighted that Mohmand Hydropower Project will not only help unleash hydropower potential of the Khyber Pakhtunkhwa Province but also improve energy security by increasing share of hydel power in the country’s energy mix.
The Minister for Economic Affairs appreciated the Saudi support in the priority development areas.
H.E. Nawaf bin Saeed Al-Malkiy @KSAembassyPK called on the Minister for Economic Affairs @OmarAyubKhan and conveyed approval of SAR 901 Mn (PKR 37.4 Bn) for Mohmand Hydropower Project by @SaudiFund_Dev. It is highly concessional financing @ 2% with 25-years repayment period. pic.twitter.com/dY9rie83lS
— Economic Affairs Division, Government of Pakistan (@eadgop) June 10, 2021
The tweet by Economic Affairs Division said, “Mohmand Dam will be constructed on Swat River in District Mohmand of KP & generate 800MW electricity. It will also irrigate 16,000-acre land and boost agriculture in the region. It will play a vital role in the socioeconomic uplift of the province.”
It added, “Saudi Ambassador assured of KSA’s continued support at all level to further strengthen economic cooperation between the two brotherly countries. He said that the Saudi side is committed to playing a much stronger role in the socioeconomic development of Pakistan.”
It must be mentioned that on May 19th, the Prime Minister of Pakistan performed the groundbreaking of the Mohmand Dam construction site where he said the previous governments instead of building dams for affordable electricity generations, signed exorbitant agreements which were infeasible for the economy to make money off the top.
While talking to the media at the ceremony, PM was regretful that now the government is bound by these decisions and contracts, adding, we have to pay them off whether or not we buy electricity from them due to which our capacity payments will jump to Rs1,455 billion by the year 2023.
In a recent interview with the GVS Managing Editor, Special Assistant to PM on Power and Petroleum Tabish Gauhar said that different power projects in the country that cannot be rolled back are 87.
It is worth mentioning that this is other than the projects that have led to the current electricity generation capacity of 32000 megawatts, which already is an excess supply considering the demand for electricity in Pakistan.
According to the SAPM, new 87 projects would be an addition of 23000 MW to the grid by 2029.
It is worth noting that the IPP projects and other such projects mentioned above that the government criticizes are on a take-or-pay basis, meaning the government, and essentially customers have to pay these power producers, whether the electricity is used or not.
Mr. Gauhar mentioned in the interview that HUB power was the first IPP in Pakistan, and the government is paying them Rs30 billion in capacity charges per annum, and their dispatch is less than 1 percent of the time during the year, meaning their electricity is used very occasionally.
The government, he mentioned is planning to buy out all the furnace-oil IPPs and retire them, thus reducing the burden on the consumers, and would reduce the circular debt by Rs200 billion.
SAPM Tabish Gauhar said that the government has asked the investors to renegotiate the signed-and-sealed contracts to make them more feasible for Pakistan in the long run.
Saudi Arabia has approved a funding of 901 million Saudi Riyal for the construction of Mohmand Hydropower Dam, reported quoting Kingdom’s Ambassador to Pakistan Nawaf Bin Said Al-Maliki pic.twitter.com/wXeU0tdw0l
— Saudi Pro (@saudi_pro) June 10, 2021