A 300MW hydropower plant to be built on the Kunhar river near Balakot City in Khyber Pakhtunkhwa Province, Pakistan, is to receive a $300 million from the Asian Development Bank to aid construction costs.

The Balakot hydropower plant will add 1143GWh of clean energy annually to Pakistan’s energy mix, is expected to be commissioned by 2027. It will incorporate seismic strengthening and climate-proofing measures.

“Pakistan is highly vulnerable to climate change, with water resources and energy particularly at risk from floods, droughts, high temperatures, and other extreme weather events,” said ADB Principal Energy Specialist Adnan Tareen. “In line with Pakistan’s climate change adaptation and mitigation priorities, this climate-resilient hydropower plant will boost the country’s clean energy generation while effectively utilizing its vast water resources.”

Balakot will generate economic activity and improve the skills of local communities. During construction, the project will generate more than 1,200 jobs, about 40% of which will be sourced locally, and provide livelihood skills development for women.

A community development program will help to improve livelihood opportunities for affected households and adjacent communities, including women and vulnerable segments of the population. This will help to build economic resilience and improve the capacity of affected people to cope with climate change, natural disasters, and other risks.

The plant will substantially increase the revenue of the state-owned Pakhtunkhwa Energy Development Organization, which is responsible for operating hydropower plants in Khyber Pakhtunkhwa. It will help reduce average daily load shedding in the province and serve the national demand.

The government will invest $175 million in the project. It has also requested a $280 million loan in project co-financing from the Asian Infrastructure Investment Bank.

Pakistan is rich in hydropower resources but only around 16% of its identified hydropower potential has been harnessed. The country’s power sector is reliant on imported fuel-based power generation and is burdened with a stressed transmission and distribution network. To balance the energy mix and reduce its dependence on imported fuel, the government has committed to increase its untapped renewable energy potential in hydro, solar, and wind.