Pakistan has achieved financial close of first hydro independent power project (IPP) under the framework of China-Pakistan Economic Corridor (CPEC) with $1.8 billion investment for the 870 MW Suki Kinari Hydropower Project, to be constructed in scenic Kaghan in Manshera District.
The documents were signed by Managing Director, Private Power and Infrastructure Board (PPIB) Shah Jahan Mirza and Chief Executive of Suki Kinari Hydropower Project, Haseeb Khan. Minister for Water and Power Khawaja Muhammad Asif, who is the Chairman of PPIB, witnessed the signing ceremony.
Suki Kinari Project is being developed with an investment outlay of $1.8 billion through debt equity ratio of 75:25 per cent. The lenders for the project include Export-Import Bank of China, and Industrial and Commercial Bank of China (ICBC).
Speaking on the occasion, Minister for Water and Power Khawaja Asif termed financial close a biggest achievement which would pave the way for investment by other IPPs in the hydel power project. He said the land for the project has been acquired and work would commence within next two months.
Suki Kinari Project is located on River Kunhar, a tributary of River Jhelum, District Mansehra, in the eastern part of Khyber Pakhtunkhwa between Naran and Paras towns. Khyber Pakhtunkhwa. Al-Jomaih Holding Company, (LLC) (Saudi Arabia), China Gezhouba Group Company (China) and Haseeb Khan Limited (Pakistan) are sponsors of the project.
The minister said the latest development reflected the government’s pledge to make CPEC a foundation for eliminating load-shedding and achieving self-reliance through generating clean and affordable electricity in the country. Setting up of hydro power projects would improve energy mix in the country and reduce dependence on imported fuel resulting into saving of millions of dollars of precious foreign exchange annually.
The establishment of this project would also be instrumental in generating economic activities as well as creating employment opportunities for the people of the areas in particular and would also entail improvement of the basic infrastructure in the vicinity which would be helpful in the poverty alleviation of the people, he said.
This is the first hydro power project in Khyber Pakhtunkhwa being developed by the private sector and so far the largest hydro IPP in Pakistan. The construction activities at the site of project have already commenced and the project is expected to start injecting 3081 MW million clean, reliable and affordable units of electricity each year to the national grid by 2022.
Further, the Government of Khyber Pakhtunkhwa will also receive a significant amount of Rs 1.3 billion per annum as water use charges, while after thirty (30) years of operations on Build-Own-Operate-Transfer (BOOT) basis under the Power Policy 2002, the project will be transferred to the Government of Khyber Pakhtunkhwa at a notional price of Rs 1.
