Pak, OFID sign $30-mn agreement for power project

IslSamabad: Pakistan and the Opec Fund for International Development (OFID) signed two agreements of US $15 million each for the Golan Gol Hydropower Project.

The agreements were signed in Vienna by Shahbaz, Ambassador of Pakistan to Austria and Suleiman J Al-Herbish, Director General of the OFID on behalf of government of Pakistan and Opec Fund respectively.

The project, involving $30 million co-financing from the OFID, is located on the Golan Gol River, a left bank tributary of the Mastuj River. The powerhouse of the project is located in the North West Frontier Province (NWFP) along Chitral-Bunni Road at a distance of about 25 kilometers from Chitral.

The project has an installed capacity of 106 MW (annual energy production : 436 million kWh). Work on the project is already under way and the Opec Fund's financial assistance will be utilised in procurement, installation and testing of transmission line and grid stations extension.

Speaking on the occasion, the Director General OFID, Suleiman J Al-Herbish, recalled that OFID Pakistan co-operation spanned over more than 30 years now. He expressed the Fund's continuing commitment to this cooperation in coming years.

Referring to the global financial turmoil, he stressed that OFID's decision to sign two loan agreements with Pakistan during these times showed the trust which the Fund had in the resilience of the economy of the country. In his remarks, Ambassador Shahbaz thanked the Director General for OFID's financial support for a number of projects in Pakistan.

Regarding the Golan Gol Hydropower Project, he underlined its particular importance for Pakistan at a time when the country was faced with imbalance between energy demand and its production capability. He expressed the hope that the co-operative relationship between Pakistan and the Fund will grow further.

The OFID has been co-financing, both the public and the private sector, projects in Pakistan. Fifteen of these projects have already been completed. After the signing of these loan agreements, the Fund's total financial assistance to Pakistan will rise to about $300 million. Pakistan and the Fund also have an encouragement and protection of investment agreement, which was signed in February 2001. OFID has also been extending humanitarian assistance to Pakistan at the time of natural disasters as it assisted during the floods in 2007 and disastrous earthquake in 2005.