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World Bank Approves $1 Billion Loan for Dasu Hydropower Project, Boosting Pakistan’s Energy Sector

Pakistan’s energy sector received a significant boost with the approval of a $1 billion loan by the World Bank for the 2,160-megawatt Dasu Hydropower Project. This critical infrastructure initiative aims to address the country’s energy needs by providing affordable and reliable electricity.

World Bank Approves $1 Billion Loan for Dasu Hydropower Project, Boosting Pakistan's Energy Sector

Despite initial delays, the World Bank’s board has now greenlit the financing for the project, marking the third major investment in Dasu. The approval underscores the project’s importance for Pakistan’s energy future, especially in light of the challenges posed by the high cost of electricity generated from imported fuel.

The Dasu project, originally slated for completion by December 2021, has faced setbacks, leading to a revised target date of 2028. Additionally, the project’s cost has increased by 13%, with the World Bank’s updated estimate reaching $4.9 billion.

However, despite these challenges, Dasu offers significant long-term benefits. The World Bank estimates that the project will save Pakistan approximately $1.8 billion annually in fuel import costs. Furthermore, it is expected to contribute to environmental sustainability by reducing carbon dioxide emissions by 5 million tons per year.

The approval of the loan signals a significant step towards Pakistan’s goal of achieving energy security and economic growth. With the World Bank’s renewed commitment, the Dasu Hydropower Project is well-positioned to pave the way for a brighter energy future for the country.

In related economic news, earlier forecasts by the Asian Development Bank (ADB) projected a rise in Pakistan’s growth to 1.9% in FY2024 and 2.8% in FY2025, a significant improvement from the 0.2% contraction experienced last fiscal year. The growth is anticipated to stem from a recovery in both agriculture and industry sectors.

Chicken Rate in Pakistan 21th March 2024

However, challenges such as the surge in living costs and tight macroeconomic policies are expected to constrain domestic demand. Growth is projected to remain subdued in FY2024 but is anticipated to pick up in FY2025, contingent upon the effectiveness of economic reforms.

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