The US Agency for International Development (USAID) and WAPDA signed the agreement at a ceremony held in Islamabad.
"America and Pakistan have a long history of cooperation in the energy sector," American Ambassador to Pakistan David Hale said while speaking at the ceremony.
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The Kaitu Weir is Stage 1 of the larger Kurram Tangi Dam Project (KTDP). By completing the construction of KTDP-Stage 1, more than 16,000 acres of agricultural land will be irrigated and an additional 18 megawatts of electricity will be produced, enough to benefit 100,000 Pakistanis.
Since 2009, the US has invested more than 53.1 billion rupees to develop Pakistan's power sector, benefiting more than 28 million Pakistanis and adding more than 2,400 megawatts of electricity to the national grid.
This includes 1,013 megawatts from new or rehabilitated dams and thermal power plants, and 1,447 megawatts from improvements in the transmission and distribution system.
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