ISLAMABAD: Implementation and water use agreements were signed on Tuesday for construction of 700 megawatts of hydroelectric power station on Jhelum River in Kashmir.
Azad Jammu and Kashmir Secretary Electricity Zafar Mahmood Khan and Azad Pattan Power Private Limited CEO Li Xiaotao signed the agreements to build the hydropower project, 90 kilometer from Islamabad.
Other relevant agreements were signed in July.
“Today’s development will further pave the way for achievement of financial close of the project,” energy ministry said in a statement.
The project, part of the China-Pakistan Economic Corridor (CPEC), is estimated to have an investment of over $1.35 billion. The project will involve no fuel import, enabling the country to move towards cheaper and greener power generation.
Letter of support was issued by Private Power and Infrastructure Board (PPIB) to the project, which is a run-off-the river scheme on River Jhelum located at dual boundary between districts Bagh and Rawalpindi.
China Gezhouba Group and Laraib Group Pakistan are the shareholders of the project. The consortium of lenders consists of China Development Bank, China Construction Bank, Industrial and Commercial Bank of China and Bank of China.
Azad Pattan Project is being implemented by PPIB under the Policy for Power Generation Projects 2002 on built, own, operate and transfer basis for a term of 30 years after which it will be transferred to the Kashmir government free of cost.
The project while bringing in valuable foreign direct investment will provide energy of about 3,266 gigawatt-hour per year to the grid by 2027, according to the energy ministry.
The project also will play crucial role in stimulating local economy by providing employment and business opportunities during its construction periods.
Furthermore, the governments of Kashmir and Punjab will earn significant amount of revenue on account of taxes and fees while during operation period water use charges of approximately Rs1.5 billion would be shared equally by both governments on annual basis. Moreover, after completion of construction work, tourism activities around reservoir/lake and water sports and fishing are also associated avenues for earning valuable revenue.
The participants of the signing ceremony appreciated the efforts of PPIB for efficient processing of hydropower projects including the Azad Pattan hydropower project and urged to continue facilitating investors in the same run for achieving optimum results.
Azad Pattan is a part of the fleet of four hydropower projects being processed by PPIB under the CPEC banner out of which 720 MW Karot and 884 MW Suki Kinari hydropower projects are under construction while 1,124 MW Kohala project is under financial closing.