The Chinese company will hand over the Karot project, which is 80% in Punjab (powerhouse) and 20% in Azad Jammu and Kashmir (reservoir), to the government of Pakistan after 30 years PHOTO: FILE
ISLAMABAD: China Three Gorges South Asia Investment Limited on Friday achieved financial close of 720-megawatt Karot hydroelectric power project and second phase of a 100MW wind power project.
To mark the occasion, representatives of China Three Gorges South Asia Investment, Private Power and Infrastructure Board (PPIB) and Alternative Energy Development Board (AEDB) inked agreements at a ceremony. Minister of Water and Power Khawaja Muhammad Asif was also present.
The levellised tariff of Karot hydroelectric power project, costing $1.7 billion, is Rs7.68 per unit. The wind power project will cost $250 million, taking total cost of the two schemes to around $2 billion. Both fall in the priority list of projects of the China-Pakistan Economic Corridor (CPEC).
The Karot project is located on Jhelum River and it is the fourth among five hydroelectric power projects to be developed along the river.
Deal signed for 720MW Karot power project
Its installed capacity will be 720MW - four units of 180MW each - with average annual output of 3,206 gigawatt-hours.
As a single power generation complex, the project's structure layout includes a rock-filled dam, spillway, powerhouse, diversion tunnels, head-race power tunnels and tail-race tunnel end.
It is being developed under the Power Policy of 2002 on build, own, operate and transfer (BOOT) basis with five-year construction period and 30-year concession period.
The project's first unit will start power generation in 2020 and it will come online prior to the deadline. The Chinese company had started work one year ago from its equity financing.
The company will hand over the project, which is 80% in Punjab (powerhouse) and 20% in Azad Jammu and Kashmir (reservoir), to the government of Pakistan after 30 years.
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The federal government will pay water usage charges to AJK and Punjab. After 30 years, the entire charges will be paid to AJK. It is termed a big step towards the energy mix plan of the government.
The wind power project will be completed next year.
"We signed agreements for Dasu power project a couple of days ago and today we achieved financial close of Karot and Three Gorges wind project. This company is also working on 1,124MW run-of-the-river Kohala project," Water and Power Minister Khawaja Asif said.
He pointed out that the World Bank had played a pivotal role in the Karot hydroelectric power project as things, which seemed impossible two to three years ago, were now looking possible.
PPIB Managing Director Shah Jahan Mirza praised the International Finance Corporation (IFC), an arm of the World Bank, for partially financing the project, which had been given extension twice.
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He said Three Gorges was developing six energy projects with an investment of $6 billion in Pakistan, which was not a small amount. "Government's top priority is hydel generation and indigenous resources like coal," he remarked.
China Three Gorges Chairman Dr Lu Guojun gave a presentation on the Karot power project, saying that for the first time, the company had appointed a local chief executive officer (CEO) of the company.
Syed Hasnain Haider has been appointed CEO of the 590MW Mahl hydroelectric power project.
Lu also appreciated the Exim Bank of China and the IFC for funding the project besides sharing financing details.
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