Pakistan will receive $65 million (£40.9m) to boost its hydropower sector.
The Asian Development Bank (ADB) is providing the loan to Mira Power, run by three Korean companies, which will build and operate a 102MW hydropower plant.
That’s equivalent to almost 2% of the current power shortfall in the country, according to the ADB.
The new project, located on the Poonch River in Kotli district 160km from Islamabad, will avoid 254,000 tons of carbon emissions.
Investment Specialist in ADB’s Private Sector Operations Department Mohammed Azim Hashimi said: “Severe power shortages remain a major constraint on Pakistan’s economy and scaling up the use of hydropower is essential for meeting demand and reducing the country’s reliance on costly imported fossil fuels for electricity production.
“This project also supports the Government of Pakistan’s policy of tapping the private sector for power industry investment.”