Federal Cabinet Okays $25 Million Loan Agreement With Kuwait for Mohmand Dam

The federal Cabinet has approved the signing of a $25 million financing agreement with the Kuwait Fund for Arab Economic Development (KFAED) for the Mohmand Dam Hydropower Project and endorsed a separate draft memorandum of understanding (MoU) to boost manpower exports to Kuwait’s private sector. The loan deal, equivalent to Kuwaiti Dinar (KD) 7.5 million, is the second of four tranches under a broader $100 million commitment by KFAED to co-finance Pakistan’s Mohmand Dam — a strategic water storage and power generation project. The first agreement was signed in June 2024 and fully disbursed by December last year. The Ministry of Economic Affairs initiated the process for the second tranche in February 2025. A KFAED delegation visited Pakistan earlier this month to appraise the project and finalize the draft agreement. Separately, the Cabinet also approved the signing of a draft MoU on the exchange of manpower with Kuwait, aimed at restoring and expanding the flow of Pakistani workers to the Gulf state’s private sector. The move follows a decade-long unofficial ban on Pakistani labor and is expected to rejuvenate a vital remittance corridor. Kuwait, a key GCC economy with a population of around five million — including over 3.3 million expatriate workers — has historically been an important destination for Pakistani labor. As of 2024, nearly 93,000 Pakistanis were working in Kuwait, sending home about $1 billion in annual remittances. The draft manpower MoU was initially shared by Pakistan during the 5th Pak-Kuwait Joint Commission in May 2024. Following feedback and amendments from the Kuwaiti side, the final draft was vetted again and approved by all relevant ministries. With Cabinet approval secured, both the loan agreement and the manpower MoU are now expected to be signed in the coming weeks, signaling a fresh phase in bilateral cooperation between Pakistan and Kuwait across infrastructure and labor mobility.