Pakistan has formally requested $3.5 billion funds from Saudi Arabia for the Diamer-Bhasha Dam.
Saudis will respond to this request after consulting with their financial advisor for the dam project. Pakistan’s financial advisor will engage with an advisor from Riyadh to ensure coordination on the project’s financial aspects. The formal request from KSA is expected within 1.5 to 2 months, reported a national daily.
The total cost of the Diamer-Bhasha Dam is estimated at $8 billion, with a significant foreign component of $4 billion.
Of the requested $3.5 billion from KSA, WAPDA has asked for a concessional loan of $2.3 billion at a 2.25 percent interest rate for 25 years and a 6-year grace period.
Pakistan also wants $1.2 billion as equity investment in the project at a rate equivalent to the interest cost of US 10-year Treasury Bonds, which currently stands at 4.45 percent.
The Diamer-Bhasha Dam is being constructed with a 30 percent equity and 70 percent debt financing model and is touted as the largest dam in Pakistan.
When completed, the dam is projected to generate 18 billion GWh of electricity per year. Once completed, it will have a gross storage capacity of 8.10 million acre-feet (MAF) of water and a live storage capacity of 6.4 million MAF.
