$450 million has been approved by the World Bank in financing to support Pakistan’s transition to renewable energy as the country aims to reduce its reliance on fossil fuel.
The project will help shift to domestic clean resources by investing in renewable energy generation that includes Khyber Pakhtunkhwa province’s hydropower and solar projects in the areas of Swat district and Upper Dir.
Moreover, the Khyber Pakhtunkhwa Hydropower and Renewable Energy Development Project will deal with low-carbon and low-cost electricity that will support the economic development of communities near the solar and hydropower projects by creating jobs and supporting infrastructure development and tourism activities.
Najy Benhassine, World Bank country director for Pakistan said, “This project supports Pakistan’s goal to become a low-carbon, renewable energy-reliant economy by 2030 and contributes to its national target in reducing greenhouse gas emissions to combat climate change.”
He added, “It will facilitate the expansion of renewable energy in KP by identifying and preparing solar and hydropower projects that are technically sound, environmentally and socially sustainable, and investment ready.”
Mohammad Saqib, the project’s task team leader said that the project would push the country towards cleaner energy. To incentivize locals, the renewable energy project also includes “a comprehensive skills training program to build technical capacity in identifying investment opportunities, preparing projects, and mobilizing commercial financing.”
He further said, “In addition, by installing solar photovoltaic systems onto hydropower assets, production capacity is expected to rise and generate greater return on investments.”
The project is almost worth $727 million. The World Bank is lending $450 million that includes the International Bank for Reconstruction and Development (IBRD) loan of $200 million with 7 years of the grace period and 27 years of maturity time whereas, International Development Association (IDA) credit of $250 million with 5 years of the grace period and 30 years of maturity terms.