The World Bank’s Board of Executive Directors has approved $450 million in financing to support Pakistan’s transition to renewable energy resources.
The transition would allow Pakistan to reduce its reliance on fossil fuel imports and lower costs of electricity production, said World Bank. Out of the total loan amount, $200 million will be issued as IBRD Loan, whereas, the remaining $250 million will be issued as IDA Credit.
The Khyber Pakhtunkhwa Hydropower and Renewable Energy Development Project, which costs around $727 million will help shift the national energy mix to domestic clean resources by investing in renewable energy generation, including hydropower and solar, in Khyber Pakhtunkhwa province. It will also help strengthen energy sector institutions to better manage a growing portfolio of renewable energy projects across the province.
“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,” said Najy Benhassine, World Bank Country Director for Pakistan.
“It will facilitate the expansion of renewable energy in Khyber Pakhtunkhwa by identifying and preparing solar and hydropower projects that are technically sound, environmentally and socially sustainable, and investment ready,” he added.
As per details, the project will provide low-cost and low-carbon electricity to consumers and will support the economic development of those communities near the hydropower and solar projects by revitalizing infrastructure, creating jobs, and supporting the development of tourism activities.
“To scale up renewable energy in Khyber Pakhtunkhwa, the project includes a comprehensive skills training program to build technical capacity in identifying investment opportunities, preparing projects, and mobilizing commercial financing,” said Mohammad Saqib, Task Team Leader for the Khyber Pakhtunkhwa Hydropower and Renewable Energy Development project.
“In addition, by installing solar photovoltaic systems onto hydropower assets, production capacity is expected to rise and generate greater return on investments,” he added.