Saudi Fund for Development (SFD) has agreed to provide a $240m loan to support the development of the Mohmand Multipurpose Dam project on the Swat River, Pakistan.

Mohmand Multipurpose Dam is a major hydropower complex, co-financed by the SFD, OPEC, Islamic Development Bank, and the Kuwait Fund for Arab Economic Development.

The project, previously known as Munda Dam, is expected to have a significant impact on Pakistan’s energy and water sectors.

It would contribute to Pakistan’s energy security, sustainable water supply for agriculture and human consumption and improve resilience to floods.

SFD said that the current loan will strengthen the partnership between Saudi Arabia and Pakistan, and help Pakistan achieve the Sustainable Development Goals (SDGs).

The project is in line with SDG-2 for Food Security, SDG-6 for Clean Water, and SDG-7 for Clean Energy, and embodies SDG-17, partnerships for the goals.

SFD CEO Sultan Abdulrahman Al-Marshad said: “To date, SFD has financed around 41 development projects and programs in Pakistan, amounting to approximately $1.4bn.

“In addition, SFD has financed between 2019 and 2023, oil derivatives worth more than $5.4bn, to support Pakistan’s economy, this comes as a continuation of the support provided by the Government of Saudi Arabia to the brotherly country Pakistan to build a sustainable economy.”

The Mohmand Dam project is expected to enhance water and food security and improve the standard of living for people living in the Khyber Pakhtunkhwa province of Pakistan.

It would support the socioeconomic development of the region, where almost 80% of the population resides in rural areas, by creating employment and reducing poverty levels.

The project will generate 800MW of electricity using renewable energy sources, contributing to Pakistan’s energy security.

In addition, the storage of 1.6 million m3 of water will support sustainable agricultural practices, and enable the irrigation of 6,773ha of new land.

It will increase the total cropping area in the province from the initial 1,517ha to 9,227ha, facilitating agricultural activities.

Pakistan Federal Secretary for Ministry of Economic Affairs Kazim Niaz said: “The use of renewable energy would enable sustainable energy as well as water sources, which would enhance water and food security.

“The SFD has also supported 76 development projects and programmes in the energy sector in African and Asian countries since 1975, including 33 projects and programmes in African countries, 42 projects and programmes in Asian countries, and one project in Latin America.

“Additionally, the SFD has played an active role in supporting and developing renewable energy sector projects, which amounted to 35 projects in 23 developing countries worldwide.”