Pakistan Seeks $3.5 B from Saudi Arabia for Diamer-Bhasha Dam

In a significant development, Pakistan has formally requested $3.5 billion in funding from Saudi Arabia to support the construction of the Diamer-Bhasha Dam, a critical infrastructure project aimed at addressing the country’s energy and water needs.

According to reports, the Saudi Arabia government will respond to Pakistan request for Diamer-Bhasha Dam after consulting with their financial advisor, with a formal response expected within 1.5 to 2 months.

Pakistan’s financial advisor will engage with their counterpart in Riyadh to ensure coordination on the project’s financial aspects.

The Diamer-Bhasha Dam, estimated to cost $8 billion, is a vital project for Pakistan’s economic development, with a significant foreign component of $4 billion.

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WAPDA, Pakistan’s water and power authority, has requested a concessional loan of $2.3 billion at a 2.25 percent interest rate for 25 years, with a 6-year grace period.

Additionally, Pakistan is seeking $1.2 billion in equity investment at a rate equivalent to the interest cost of US 10-year Treasury Bonds, currently standing at 4.45 percent.

The dam is being constructed using a 30 percent equity and 70 percent debt financing model and is expected to generate 18 billion GWh of electricity per year upon completion.

It will have a gross storage capacity of 8.10 million acre-feet (MAF) of water and a live storage capacity of 6.4 million MAF, making it the largest dam in Pakistan.

The successful completion of the Diamer-Bhasha Dam is crucial for Pakistan’s energy security and economic growth, and the funding support from Saudi Arabia is a significant step towards achieving this goal.

Key Highlights:

• Pakistan requests $3.5 billion funding from Saudi Arabia for Diamer-Bhasha Dam
• Saudi government to respond after consulting with financial advisor
• Formal response expected within 1.5 to 2 months
• WAPDA seeks concessional loan and equity investment
• Dam estimated to generate 18 billion GWh of electricity per year
• Project crucial for Pakistan’s energy security and economic growth

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