ADB allocates $300m for hydropower in Pakistan

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Balakot hydropower plant planned for 2027 to boost domestic clean energy.

The Asian Development Bank (ADB) has approved a $300m loan to finance the construction of a 300-megawatt hydropower plant in Pakistan’s Khyber Pakhtunkhwa province. Planned for Kunhar river near Balakot City, the plant will add 1,143 gigawatt-hours of clean energy annually to the country’s energy mix, enhancing the energy sector’s reliability and sustainability.

The project is part of the country’s move to increase its use of clean energy and improve energy security and it will incorporate modern seismic strengthening and climate-proofing measures in a region highly vulnerable to climate change and earthquakes.

With the Pakistan government also providing $175m for the project, ADB principal energy specialist Adnan Tareen welcomed steps towards construction: “In line with Pakistan’s climate change adaptation and mitigation priorities, this climate-resilient hydropower plant will boost the country’s clean energy generation while effectively utilizing its vast water resources,” he said.

National assessments suggest that only 16% of Pakistan’s identified hydropower potential has yet been harnessed. Meanwhile, its power sector is reliant on imported fuel for its power generation and the country has a stressed transmission and distribution network. To balance the energy mix and reduce its dependence on imported fuel, the government has committed to increase its use of untapped renewable energy with a series of hydro, solar, and wind power projects.

Along with providing vital green energy, the Balakot hydropower plant will also generate economic activity and be used to expand the skills base within local communities. Construction will create more than 1,200 jobs, around 500 of which are to be sourced locally. There will also be a focus on providing these opportunities to women to enhance social outcomes in the region.