The World Bank has approved an additional $1 billion loan for the Dasu hydropower project, even as it identifies the $18 billion circular debt in Pakistan’s energy sector as a significant obstacle to future investments.
The approval from the World Bank’s executive directors on Monday provides crucial financing for the ongoing Dasu project, which commenced a decade ago and has faced delays and security challenges. This latest funding increases the World Bank’s total commitment to the project to 45% of its total cost.
The project, led by the China Gezhouba Group Company (CGGC), aims to enhance hydropower capacity, improve local socio-economic services, and bolster the Water and Power Development Authority’s (WAPDA) capabilities for future hydropower initiatives.
Despite these advancements, Pakistan’s energy sector confronts numerous hurdles in achieving affordable and sustainable energy solutions, as noted by Najy Benhassine, World Bank Country Director for Pakistan. The Dasu hydropower project, situated on the Indus River, is poised to significantly impact the country’s energy landscape upon completion, with a planned capacity between 4,320 and 5,400MW.
