Three major agreements were signed between a South Korean power company, Mira Power Limited, and Azad Jammu & Kashmir (AJK) government at Mirpur for the construction of the 102 MW Gulpur Hydro Power Project on Monday.
The agreements were signed for implementation, water use and land lease for the project being built at Kotli district in the presence of AJK Prime Minister Chaudhry Abdul Majid, Senior Minister Chaudhry Muhammad Yasin, Ambassador of South Korea Jong Hwan Song, Public-Private Investment Board (PPIB) Managing Director Shah Jahan Mirza and other dignitaries.
Speaking on the occasion, AJK Prime Minister Chaudhry Abdul Majid said that the 102MW Gulpur Hydropower Project is the third hydropower IPP which was being developed in AJK under Pakistan’s Power Generation Policy 2002.
He appreciated the trust and confidence of the international investors in the peaceful environment of AJK and also reiterated his government’s commitment to extend all facilities to the international investors to develop the huge unexploited hydropower potential of Kashmir.
Mira Power Limited CEO Yoon Tae Hak said that the implementation agreement was earlier signed by his organisation with the Pakistan government in August last year. The project is all set to achieve the financial close by the end of April 2015, he claimed.
He indicated future investment plans of Korea South-East Power (KOSEP) – the parent company of Mira Power Limited – in Pakistan’s hydropower sector following the successful financial close of the Gulpur project.
PPIB MD Mirza Shah Jahan, in his speech at the ceremony, praised the company’s environmental preparations for the project in compliance with international best practices.
It may be mentioned that a special feature of the project, which has attracted international interest and attention is its location in a national park and on a river which is home to endangered species of fish. Consistent with the environmental guidelines of IFC and ADB, the project has been designed to achieve net gain in population of endangered species through implementation of a Biodiversity Action Plan that will be partly financed by electricity revenues from the project.
This novel approach to conservation has the support from independent environmental organizations, prominent among which are the Himalayan Wildlife Foundation and World Wildlife F-P, which were actively consulted during the project development.
Experts suggest that Pakistan is among the few countries in the world where a successful framework for hydropower development in private sector through non-recourse project financing is available. It only requires the priority of the government to build on this framework to develop the huge unexploited hydropower potential.
The Gulpur Power Project is an important international investment by Korean South East Power Company (KOSEP) which owns and operates power plants of around 10,000 MW capacities worldwide. The project is at an advanced stage of development. Financing for the project from the International Finance Corporation (IFC), Korean Exim Bank and Asian Development Bank has already been approved and preliminary construction work has started at the project site located in Kotli district in AJK, which is expected to start power generation by the end of 2018.