The federal Cabinet has approved two major agreements with Kuwait, marking a significant step forward in bilateral cooperation. The first is a $25 million financing agreement with the Kuwait Fund for Arab Economic Development (KFAED) for the Mohmand Dam Hydropower Project. The second is a draft memorandum of understanding (MoU) aimed at expanding the export of Pakistani manpower to Kuwait’s private sector.
The newly approved loan, equivalent to 7.5 million Kuwaiti Dinar, is the second installment under a broader $100 million financing commitment by KFAED to support Pakistan’s strategic Mohmand Dam project. This dam plays a crucial role in water storage and power generation. The first tranche, signed in June 2024, was fully disbursed by December 2024.
The Ministry of Economic Affairs initiated the process for this second tranche in February 2025. A KFAED delegation visited Pakistan earlier in May to assess project progress and finalize the agreement’s terms.
In a separate but equally significant development, the Cabinet approved the signing of a manpower exchange MoU with Kuwait. The agreement is aimed at restoring and enhancing the flow of Pakistani workers to Kuwait’s private sector, potentially reopening a major remittance corridor that had been unofficially closed for over a decade.
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Kuwait, home to about five million people — including 3.3 million expatriates — has historically relied on foreign workers, and Pakistan has long been one of its key labor sources. As of 2024, approximately 93,000 Pakistani nationals were working in Kuwait, contributing nearly $1 billion annually in remittances.
The draft MoU was first presented by Pakistan during the 5th Pak-Kuwait Joint Commission meeting in May 2024. After several rounds of feedback and revisions, the document was reviewed and cleared by all relevant Pakistani ministries. With the Cabinet’s endorsement, both the financing agreement and the manpower MoU are expected to be formally signed in the coming weeks.
These agreements reflect a renewed momentum in Pakistan-Kuwait relations, with targeted cooperation in infrastructure development and labor mobility.
