ISLAMABAD: The Government of France will provide Euros 68.3 million for the construction of a 48MW Jaggran-II Hydro Power Project, which will be built in the upper extent of Neelum River.

Agreement to this effect was signed here at Economic Affairs Division (EAD) by the Additional Secretary of EAD, Iftikhar Ahmed Rao, Ambassador of France, Philippe Thiebaud and Country Director of the French Development Agency (AFD), Nicolas Fornage here on Friday.

The project will be located downstream of the existing 30.4MW Jaggran-I hydropower project, funded earlier with French support and being operated since 2000 by the Hydro-Electric Board (HEB).

Jaggran-II Hydroelectric Power Project will operate as a run-of-the-river scheme and will not entail any major environmental or social constraints. It will be connected to the national grid and will help to alleviate the energy crisis in the country.

The project is expected to complete by 2015, will provide a reliable source of renewable energy and a permanent supply of electricity for the 1.2 million people living in the Muzaffarabad area, with strong social and economical impacts.

Besides the soft loan of Euros 68 million provided to the government of Pakistan, AFD is also providing a grant for capacity-building of HEB.

France, through Agence Francaise de Development (AFD) is providing funds to address the current national energy crisis.

To improve the power supply, AFD is supporting the development of renewable energies, currently with Jabban (22MW project in Malakand District) and Jaggran II hydropower projects.

AFD has also recently approved a soft loan of 11 million Euros, in order to fund detailed design studies for the Munda hydropower project, located in Mohmand Agency.

As a member of the Group of Friends of Democratic Pakistan, France pledged 300 million Euros at the Tokyo ministerial conference in 2009.

With the funding agreement for Jaggran II signed with EAD, France has now a portfolio of projects amounting to 213 million Euros for the water and energy sector in Pakistan, corresponding to 73 per cent of its pledge.