21/03/2007: Signature of a Loan Agreement for Kuwaiti Dinars KD 11,000,000 for financing the Golen-Gol- Hydropower Project in the Islamic Republic of Pakistan

A Loan Agreement was signed today in Islamabad between the Islamic Republic of Pakistan and Kuwait Fund for Arab Economic Development whereby the Fund will extend a loan of Kuwaiti Dinars eleven million (KD.11,000,000/-) (i.e. equivalent of 37.5 million US$) to help finance the Golen-Gol- Hydropower Project.

The Loan Agreement was signed on behalf of the Islamic Republic of Pakistan by H.E. Mr. M. Akram Malik, Secretary, Economic Affairs Division, and on behalf of the Fund by Mr. Abdulwahab Al-Bader, Director General of the Kuwait Fund for Arab Economic Development. 

The Project aims at meeting the electric power demand in the North West Frontier Province (NWFP) by developing Golen Gol Hydroelectric Power Project. The Project is located on the Golen Gol river, a tributary of Mastuj river, at about 25 Km from Chitral city. 

The Project consists of the construction of diversion weir and its related structures at Golen Gol river, one km upstream of Babukah village, construction of gravel trap, sedimentation basin, an open channel and a tunnel for diverting the river water to the power house. Also, it includes the manufacture, supply, installation and commissioning of three Hydel generating units with total capacity of about 106 MW and their auxiliary equipment. The Project includes as well the manufacture, supply, installation/ construction and commissioning of a 132 kV transmission line to connect the power plant to the national grid. 

The Project is expected to start in 2007, and to be completed by end of 2011. 

The total cost of the Project is estimated at about 7.2 billion Pakistan Rupee, the equivalent of about KD. 35.2 million, of which the foreign currency is equivalent to about KD. 15.6 million which represents about 44.5% of the total cost of the Project. The Fund's Loan will cover about 31.3% of the costs of the Project. 

The Loan will be for a period of 25 years including 6 years grace period, and will be amortized in 38 semi-annual installments, the first of which will be due on 1st date on which any interest or other charge on the Loan shall fall due after the elapse of the above mentioned grace period. 

The Loan bears an interest rate at 2.5% per annum, in addition to 0.5% per annum to cover administrative costs and other expenses incurred in the implementation of the Loan Agreement. 

By concluding this agreement, it will be the fourteenth Loan that the Fund provided to the Islamic Republic of Pakistan, where the Fund previously provided thirteen loans amounting to about 84 million Kuwaiti Dinars equivalent to about 286 million U.S. Dollars for financing projects in various sectors.