Pakistan will get as much as $65 million in loans to help advance hydroelectric power as a buffer against an aging grid, the Asian Development Bank said Monday.

"Severe power shortages remain a major constraint on Pakistan's economy, and scaling up the use of hydropower is essential for meeting demand and reducing the country's reliance on costly imported fossil fuels for electricity production," Mohammed Azim Hashimi, an investment specialist in ADB, said in a statement.

ADB funding will support a South Korean power consortium planning to build and operate a hydropower facility about 100 miles from Islamabad.

Pakistan's aging infrastructure means the country lacks a reliable power sector. The ADB describes the status of the power sector in Pakistan as "crippling."

The bank, which has headquarters in Manila, in February announced plans to help Pakistan build its first liquefied natural gas terminal with a $30 million loan. The plant will be able to convert as much as 3 million tons of LNG per year to gas for use in state power plants.

With its latest loan package, the ADP said hydropower offers Pakistan a cheaper source of electricity than "all other alternatives." The South Korean-led project would provide the equivalent of 2 percent of the country's energy shortfall.

ADB said in a development report for 2015 it expects Pakistan's economy to expand from 4.2 percent this year to 4.5 percent in 2016. Much of the regional economic growth is in part a reaction to lower oil prices, which benefits importing nations like Pakistan.