ISLAMABAD — Saudi Arabia will give a soft development loan worth more than $240 million to finance a hydropower project in Pakistan.

The Saudi Fund for Development (SFD), represented by its CEO Sultan Al-Marshad, on Friday signed the development agreement to fund the Mohmand Hydropower Dam Project.

The project aims to enhance the supply of energy and water for agricultural use and domestic consumption, as well as protection from flood risks.

At the signing ceremony, the Pakistani side was represented by the Undersecretary of the Ministry of Economic Affairs, Dr. Kazim Niaz. Saudi Ambassador to Pakistan Nawaf bin Saeed Al-Malki and several officials from both sides were present.

By financing this project, the SFD seeks to enhance Pakistan's ability to produce clean and renewable energy, by increasing the production capacity to 800 megawatts of electricity, in addition to storing about 1.6 million cubic meters of water to provide sustainable water sources for agriculture and human consumption.

The project will also enhance water and food security by irrigating more than 6,773 hectares of new agricultural land, increasing the current cropping area from 1,517 hectares to 9,227 hectares, and protecting the region from the impact of floods.

During the ceremony, SFD's CEO Al-Marshad said, "This project is an extension of the support being provided by the government of Saudi Arabia through the Fund since its inception to finance vital economic projects aimed at achieving growth and development in the Islamic Republic of Pakistan. Their number reached 41 development projects and programs with a value of $1.4 billion, in addition to financing oil derivatives with a value exceeding $5.4 billion in the past four years.

On his part, Dr. Niaz thanked the Kingdom for supporting various development sectors in Pakistan through the SFD and contributing to the financing of this vital project, citing the importance of the project and its developmental impact on the country and its people. He said the project will contribute to the provision of sustainable energy as well as water sources that ensure water and food security.

Dr. Niaz praised the development efforts made by the Kingdom through the Fund since 1976 to achieve social development and sustainable economic prosperity.

The development projects and programs financed by the Saudi Fund for Development in the energy sector at the level of African and Asian countries amounted to 76 since the beginning of its development activity in 1975. Of these 33 projects were in African countries, 42 projects in Asian countries, and one project in Latin America. This is in addition to the Fund's active role in supporting and developing renewable energy sector, which numbered 35 projects in 23 developing countries around the world. — SPA