Pakistan has formally requested $3.5 billion in financing from the Kingdom of Saudi Arabia (KSA) for the Diamer-Bhasha Dam project during a recent high-powered delegation visit from KSA on April 15-16.
A senior government official mentioned that KSA would respond after input from the financial adviser on the dam project. Both KSA and Wapda, Pakistan’s water and power development authority, will appoint financial advisers to conduct due diligence on the project’s business model.
The total cost of the Diamer-Bhasha Dam is $8 billion, with a foreign component of $4 billion. Wapda has already secured $500 million through its Euro Bond.
Pakistan has asked for a concessional loan of $2.3 billion from KSA at a 2.25% interest rate for 25 years, with a grace period of six years. Additionally, it seeks $1.2 billion as equity in the project at a 4.45% interest rate, aligned with US 10-year Treasury Bond rates.
The Saudi Fund has already provided $240 million as a concessional loan at 2.25% for 25 years. The Diamer-Basha Dam project, with a 30% equity and 70% debt ratio, is the largest dam in Pakistan and the tallest Roller Compacted Concrete (RCC) dam globally.
Construction work has commenced on the dam, which is projected to generate around 18 billion GWh annually and produce 4,500 megawatts of electricity. 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.
Story by Khalid Mustafa
