The Asian Development Bank announced on Tuesday that it will be extending Pakistan a $300 million loan to finance the construction of a 300-megawatt hydropower plant near Balakot.

"The Asian Development Bank (ADB) has approved a $300 million loan to finance the construction of a 300-megawatt hydropower plant that will increase the share of clean energy in Pakistan and improve the country’s energy security," said the lender in a statement.

The Manila-based lending agency said the government will invest $175 million in the project. It also shared that Islamabad has requested a $280 million loan in project co-financing from the Asian Infrastructure Investment Bank (AIIB) as well.

The ADB said that the plant will add 1,143 gigawatt-hours of clean energy to Pakistan's energy mix and also improve the energy sector’s reliability and sustainability.

The lender said that the plant will be constructed on the Kunhar River near Khyber Pakhtunkhwa's Balakot and will be commissioned by 2027. It also said that the plan will include seismic strengthening and climate-proofing measures.

The bank said that the plant will "generate economic activity and improve the skills of local communities".