World Bank approves $1bn loan for 2.2-GW hydropower project in Pakistan

The World Bank announced that it has given the green light to a US$1 billion financing package for the development of the Dasu Hydropower Stage-I Project (DHP-I) in Pakistan.

The package consists of an International Development Association (IDA) credit of US$588.4 million and an IDA partial credit guarantee (PCG) of US$460 million to help mobilize commercial financing for the project.The credit is financed from IDA, the World Bank Group’s grant and low-interest arm. It will be on standard IDA terms, with a maturity of 25 years, including a grace period of 5 years.

The Dasu Hydropower Stage-I was approved by the Executive Committee of the National Economic Council on 29 March 2014. That stage will cost an estimated US$4.278 billion. Funding is being provided by the World Bank (US$1 billion), the Industrial and Commercial Bank of China (US$2 billion) and Deutsche Bank (US$1 billion). Completion of stage one is expected in March 2019.

DHP-I will have 2,160MW hydropower plant, which can be expanded to 4,320MW in future with low additional cost.

Rachid Benmessaoud, World Bank Country Director for Pakistan, stated:

Dasu Hydropower Project is important for helping the people of Pakistan to reduce their carbon footprint and make electric power generation more sustainable. The program is an important part of the transformational energy initiative of Pakistan, in which the support from across the World Bank Group is focused on helping Pakistan's energy sector out of its crisis and onto a more sustainable path that supports economic growth.

DHP-I is a run-of-river project located on the Indus River about 240 km upstream from the Tarbela dam, close to Dasu town, in Kohistan district. It is an important element of the government’s strategy to restore Pakistan’s energy sector to a role that will effectively support long-term economic growth. The 242m dam project will also help build the Water and Power Development Authority’s (WAPDA) capacity to harness the vast hydropower resources of the country in a sustainable manner.