Pakistan signs $2.4 billion tripartite agreement for hydropower project

ISLAMABAD: A tripartite agreement was signed on Thursday between a Chinese company and the governments of Pakistan and China for the construction of a 1,124 megawatt hydropower project in Kohala costing $2.4 billion.

Prime Minister Imran Khan, Azad Jammu and Kashmir Prime Minister Raja Farooq Haider, federal cabinet members, Chinese Ambassador in Pakistan Yao Jing, China Pakistan Economic Corridor (CPEC) authority, Chairman Lt Gen (retd) Asim Saleem Bajwa and representatives of the Chinese company attended the signing ceremony.

It is the largest power sector investment of $2.4 billion in a single Independent Power Producer (IPP).

The Kohala Hydropower Project, being built on Jhelum River in AJK under CPEC, has been awarded to Kohala Hydropower Company Ltd (KHCL), which is a subsidiary of China Three Gorges Corporation (CTGC).

Addressing the signing ceremony, the prime minister said it was a “great step” towards foreign investment, and that Pakistan should have invested in the hydropower sector far earlier.

He said the country was progressing well when it had been producing hydropower until it started banking on imported fuel which not only made the local industry non-competitive but also put additional burden on foreign reserves.

The prime minister said power generation through imported fuel adversely impacted the environment and Pakistan was among nine countries that were the worst hit by climate change, necessitating the promotion of clean energy.

PM Imran said Kohala Hydropower Power Project drew the "biggest ever" investment in Pakistan on a single project.

Pakistan welcomed the investment as it could also set a trend for the country to further move towards clean energy and to reduce the dependence on imported fuel.

The prime minister told the AJK premier that the project would also create much-needed jobs for youth both during the construction as well as operations.