The World Bank’s Board of Executive Directors approved $1 billion as the second round of additional financing for the Dasu Hydropower Stage I (DHP I) Project.

As per a statement released by the global lender on Monday, the financing will support the expansion of hydropower electricity supply, improve access to socio-economic services for local communities, and build the Water and Power Development Authority’s (WAPDA) capacity to prepare future hydropower projects.

“Pakistan’s energy sector suffers from multiple challenges to achieving affordable, reliable, and sustainable energy,” said Najy Benhassine, World Bank Country Director for Pakistan.

“The Dasu Hydropower Project site is one of the best hydropower sites in the world and is a game changer for the Pakistan energy sector. With a very small footprint, the DHP will contribute to ‘greening’ the energy sector and lowering the cost of electricity.”

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Dasu Hydropower Project is a run-of-river project on the Indus River about 8 km from Dasu Town, the capital of the Upper Kohistan District of Khyber Pakhtunkhwa.

Upon completion, the project will have an installed capacity of 4,320–5,400 MW.

As per the statement, the project is being built in stages. DHP-I has a capacity of 2,160 MW and will generate 12,225 gigawatt hours (GWh)/year of low-cost renewable energy. The DHP-II will add 9,260–11,400 GWh per year from the same dam.

“DHP-I is an essential project in Pakistan’s efforts to reverse its dependence on fossil fuels and reach 60 percent renewable energy by 2031.” said Rikard Liden, Task Team Leader for the Project.

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“The second additional financing will facilitate the expansion of electricity supply and potentially save Pakistan an estimated $1.8 billion annually by replacing imported fuels, and offset around 5 million tons of carbon dioxide. The annual economic return of DHP-I is estimated to be around 28%.”

The World Bank said the additional financing will further support ongoing socio-economic initiatives in Upper Kohistan, particularly in the areas of education, health, employment, and transport.