Pakistan is actively seeking $3.5 billion in financing from the Kingdom of Saudi Arabia (KSA) for the ambitious Diamer-Bhasha Dam project. During the visit of a high-powered delegation from KSA on April 15-16, discussions centered around securing crucial funding for the construction of this vital infrastructure. The cost of the Diamer-Bhasha Dam is estimated at $8 billion, with a significant portion of the financing to be sourced from foreign sources. Wapda, Pakistan’s Water and Power Development Authority, has already arranged $500 million through its Euro Bond issuance, but additional funding is required to meet the project’s total cost.
Out of the $3.5 billion sought from KSA, Wapda has requested a concessional loan of $2.3 billion at an interest rate of 2.25% for 25 years, with a grace period of six years. Additionally, Pakistan is seeking $1.2 billion as equity in the project, aligning with international interest rates.
The Diamer-Bhasha Dam project holds immense significance for Pakistan’s energy security and water management. Once completed, it is expected to generate around 18 billion GWh of electricity annually, contributing significantly to the country’s energy needs. With a gross storage capacity of 8.10 million acre-feet (MAF) of water, the dam will also address critical water storage challenges, supporting agriculture and mitigating the impact of water scarcity.
The project is already underway, with work commencing on the dam construction. Upon completion, the Diamer-Bhasha Dam will stand as the tallest Roller Compacted Concrete (RCC) dam in the world, showcasing Pakistan’s commitment to infrastructure development and sustainable resource management.
The ongoing negotiations between Pakistan and KSA underscore the importance of international cooperation in realizing large-scale infrastructure projects that are vital for economic growth and national development.