IsDB approves $252.5mln funding for Mohmand Dam, vaccines

ISLAMABAD: The Islamic Development Bank (IsDB) has approved $252.5 million funding for the construction of Mohmand Dam, and provision of vaccines to combat the Covid-19 pandemic.

The 343rd meeting of the board of executive directors of the bank gave the approval for the allocation of $180 million to contribute to the financing of Mohmand Dam and hydropower project in Khyber Pakhtunkhwa. The meeting was chaired by IsDB President and Board Chairman Dr Muhammad Al Jasser.

Once completed, the dam would be the 5th highest concrete-face-rock-filled dam (CFRFD) in the world, adding 800MW to installed hydropower capacity. It would also provide clean potable water to 2 million residents in Peshawar, while boosting food security via irrigation for agricultural activities on 6,773 hectares of new farmlands.

Pakistan’s energy sector has received the largest share of IsDB Group’s development interventions by absorbing 68.4 percent (about $9.3 billion) of the group’s investments. A week ago, the IsDB also approved $72.5 million of funding to support Pakistan’s vaccination efforts against Covid-19.

Under this approval, the country’s “IVAC COVID-19 Vaccine Support Project” – also co-funded by the World Bank and the Asian Development Bank - would receive $70 million from IsDB as well as $2.5 million from IsDB’s Islamic Solidarity Fund for Development (ISFD).

This comes in the framework of the second track (R2) of IsDB Group’s $4.56 billion Strategic Preparedness and Response Program (SPRP), specifically designed to support member countries with their health and economic recovery programmes against the pandemic.

Pakistan is a founding member of the IsDB and the 3rd largest beneficiary of IsDB Group financing. The development cooperation between the two parties goes back to 1970s when the first development operation in Pakistan was approved on June 5, 1977.

Meanwhile, Dr Al-Jasser, who is in Islamabad on a four-day visit to attend the 17th Extraordinary Session of the OIC on Afghanistan, called on Omar Ayub Khan, Federal Minister for Economic Affairs and Governor of the IsDB in the Ministry of Economic Affairs, Islamabad. Both sides discussed the ongoing economic cooperation between Pakistan and IsDB.

Dr Al-Jasser reiterated that IsDB was one of the leading development partners of Pakistan and fully supports the government of Pakistan’s development vision and priorities. He assured the minister that the Bank would continue to mobilise more financial resources for developing infrastructure, uplifting social sector and achieving sustainable economic growth. It was also assured that the IsDB would continue to leverage private financing to support trade needs, including import of petroleum products.

During the meeting, a financing agreement of $72.5 million for procurement of COVID-19 vaccine was also signed between the IsDB and Economic Affairs Division. The minister thanked Dr Al-Jasser for his continued support to Pakistan.

He applauded the bank’s role in supporting member countries in Covid-19 response, recovery and procurement of vaccine and saving lives and livelihood amid the pandemic. It was also highlighted that IsDB does not have a regional office in Pakistan like in Turkey and some other member countries. During the discussions, Khan underlined the need to have a regional office in Islamabad for better collaboration and engagement with the bank.