The US special representative for Afghanistan and Pakistan, Richard Holbrooke, and Pakistani water and power minister Javed Iqbal were among those signing an agreement to develop the $375 million project.
The US Embassy in Islamabad said the project would reduce Pakistan’s dependence on fuel imports and save Pakistanis $45 million a year.
The Pakistani government and AES will invest in the project, leveraging a loan from the US Overseas Private Investment Corporation (OPIC), a US agency that sells foreign investment services.
Pakistan will own a minority stake through a grant from the US Agency for International Development (USAID). These shares will be privatised over time, with the proceeds financing future energy projects.
AES country director Iqbal Sheikh and US Agency for International Development (USAID) Pakistan mission director Andrew Sisson also signed the agreement.
Holbrooke said: "This project represents a meaningful, environmentally sound step toward addressing Pakistan’s energy crisis.
"Partnership with the private sector will also demonstrate the potential of investing in the power sector in Pakistan."
It is not the first time that a US agency has invested in overseas wind development. The Export-Import Bank allocated $158.5 million for three US firms to supply turbine equipment to a 102MW project in Honduras.
