The World Bank is providing a credit line of $1 billion for the Dasu project while remaining funds are being arranged by Wapda through its own resources and with the help of government’s sovereign guarantees. PHOTO: FILE
“At present, Wapda is engaged in negotiations with different financiers to secure critical funds,” said a senior official of the Ministry of Water and Power while talking to The Express Tribune.
“In order to make inroads into the global capital market and reassure potential investors, Wapda also requires guarantees of the government of Pakistan, which will help borrow $350 million.”
The official revealed that the World Bank would give a partial credit guarantee of $210 million and Pakistan government would offer a counter-guarantee to the bank.
Wapda - a state-owned organisation that works on building water reservoirs and hydroelectric power plants - has already secured financing of Rs144 billion in Pakistani rupees for the Dasu project by signing an agreement with a consortium of major local banks, led by Habib Bank Limited.
This is by far the biggest loan agreement for any public sector enterprise in the history of Pakistan.
The Dasu hydroelectric power project will be built in two stages - each of them will bring power production capacity of 2,160MW - on the Indus River in Kohistan district of Khyber-Pakhtunkhwa.
Stage-I will take five years and cost an estimated $4.2 billion. The World Bank is providing a credit line of $1 billion while remaining funds are being arranged by Wapda through its own resources and with the help of sovereign guarantees of the government of Pakistan.
Apart from the Dasu project, Wapda is working on the Kachhi Canal scheme and its first phase will be completed between August and December this year. The canal will irrigate 72,000 acres of land in the backward areas of Balochistan.
Wapda will also make ready 969MW Neelum-Jhelum hydroelectric power project, 1,410MW Tarbela fourth extension power project and 106MW Golen Gol hydroelectric power project in phases from the end of 2017 to mid-2018.
The low-cost hydel electricity to be produced by these projects will not only help tackle energy shortages in the country, but will also contribute significantly to the development of economic and social sectors.
For the Dasu power project, Wapda has penned two contracts namely Main Works (MW)-01 worth Rs115 billion and MW-02 costing Rs64.4 billion with China Gezhouba Group Company for main civil works.
MW-01, which will be completed in about five years, includes construction of the main dam, appurtenant structures and hydraulic steel structures whereas MW-02 comprises construction of an underground power complex, tunnels and hydraulic structures.
Published in The Express Tribune, April 15th, 2017.
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