Islamic Development Bank Approves $252.5 Million Funding for Pakistan

The Islamic Development Bank (IsDB) has approved $252.5 million of funding for two vital projects in Pakistan aimed to support the country’s green agenda in the energy sector and its ongoing efforts to counter the adverse impacts of COVID-19.

President IsDB Dr. Muhammad Al-Jasser, who is in Islamabad on a four-day visit to attend the 17th Extraordinary Session of the OIC on Afghanistan, called on Federal Minister for Economic Affairs, Omar Ayub Khan, and Governor IsDB at the Ministry of Economic Affairs in Islamabad.

Chaired by President IsDB and Chairman Board, Dr. Muhammad Al Jasser, the 343rd meeting of the IsDB Board of Executive Directors, on 18 December 2021, gave the green light to the allocation of $$180 million to contribute to the financing of the strategic “Mohmand Dam and Hydropower Project’’ in Pakistan’s Khyber-Pakhtunkhwa (KP) province.

Once completed, Mohmand Dam will be the 5th highest Concrete-Face-Rock-Filled Dam (CFRFD) in the world and will add 800MW to the country’s installed hydropower capacity.

The two sides discussed the ongoing economic cooperation between Pakistan and IsDB.

Dr. Muhammad Al-Jasser underlined that IsDB was one of the leading development partners of Pakistan and it fully supported the Government of Pakistan’s development vision and priorities. He assured the Minister that IsDB would continue to mobilize more financial resources for developing infrastructure, uplifting the social sector, and achieving sustainable economic growth. It was also assured that IsDB would continue to leverage private financing to support trade needs including the import of petroleum products.

During the meeting, IsDB and the Economic Affairs Division signed a financing agreement of $72.5 million for the procurement of COVID-19 vaccines. The Bank’s financing for the procurement of the vaccine will help to contain the spread of the pandemic. The President, IsDB further updated that the Bank has also approved $180 million financing for Mohmand Dam Hydropower Project.

Omar Ayub Khan thanked President IsDB for visiting Islamabad and his continued support to Pakistan. He applauded IsDB’s role to support the member countries in COVID-19 response, recovery, and procurement of vaccines and saving lives & livelihood amid the pandemic.

The Minister also thanked President IsDB for his resolve to support the financing needs of the country in the future. He appreciated IsDBs support in green and clean energy development projects, like the Mohmand Dam Hydropower Project, which will not only generate 800MW electricity but also enhance Pakistan’s Water Storage Capacity by 1,293 million acre-feet (MAF), create a food security buffer, provide 13.32 cumec of clean drinking water to the residents of Peshawar and will create more than 6,000 direct new employment opportunities for the local people.

The Minister for Economic Affairs appreciated the role and endeavors of President IsDB and his team for arranging this financing at a very challenging time.

The President IsDB assured to further strengthen its partnership with Pakistan.

It was also highlighted that IsDB did not have a regional office in Pakistan like in Turkey and some other member countries.

During the discussions, the Minister underlined the need to have a regional office in Islamabad for improved collaboration and engagement.

Pakistan is the founding member of the Bank. IsDB is an important multilateral development bank with 57-members. Pakistan is the 2nd largest beneficiary of the IsDB financing. Since its inception, IsDB has approved $13.6 billion in financing for Pakistan. The IsDB financing for Pakistan is covering all the major sectors of the economy such as energy, industry, agriculture, transport, health, and financial services.