China International Water and Electric Corporation (CWE), a state-owned entity, would invest $6 billion in energy projects in Pakistan over the next five years, said the company’s Vice President Wang Shaofeng.
If the company invests what it promised in a meeting with Board of Investment Chairman Muhammad Zubair, it will become the single largest investment which is four times bigger than the total foreign investment the country received in the last fiscal year.
CWE is owned by the Chinese government and is engaged in contracting overseas engineering projects. The BOI did not provide details of the investment except that out of $6 billion as much as $2 billion would be invested in energy projects in Karachi.
The BOI chairman stressed that in the next five years investment-to-gross domestic product ratio would be increased to 20% from the current low of 13%, calling the task one of the top two priorities of the new PML-N government.
Zubair said the initiatives that the government would take to restore the confidence of international investors would start giving results after two years.
Chinese firms have started interacting with Pakistani authorities following Prime Minister Nawaz Sharif’s visit to Beijing earlier this month. During the trip, Nawaz held several meetings to woo investors into Pakistan.
The premier has declared the Planning Commission as the focal organisation that will deal with all China-related initiatives.
A China Corridor has been set up in the Planning Commission – a special cell that will deal with Chinese projects, particularly Gwadar-Kashgar trade corridor. The prime minister has termed this corridor “the future of the world”.
CWE’s Shaofeng said his company was already working on nine projects in Pakistan.
The company is developing a 50-megawatt Three Gorges wind farm. The project’s financial close is said to be almost complete.
All civil works and 50% installation of wind turbines are scheduled to be completed by the end of this year. The project will start commercial operation by June next year.
The company is conducting feasibility study for 720MW Karot hydropower project and its tariff has already been approved by the National Electric Power Regulatory Authority. The construction of the project will take five years.
CWE is also engaged in 1,100MW Kohala hydropower project, which is in initial stages. Tariff negotiations with regulatory authorities have been going on since September 2011, but no tangible results have come out. The company is eager to acquire land and start construction work in 2015.
Another project in which the company is involved is 120MW Taunsa hydropower project, approved by the Punjab Power Development Board (PPDB) on June 25 this year. Construction will start in 2015 and will be completed in four years.
The PPDB has also approved feasibility study for a 50MW solar power project in Punjab. Another 50MW solar power project will be set up in Sindh.
CWE is also planning Three Gorges wind farms of 100MW and 350MW. It is involved in a wind measurement project in Punjab and is installing a wind mast in Chakwal and Rajanpur.
Published in The Express Tribune, July 20th, 2013.