Karot Hydro Power Plant

Although the primary focus of the CPEC energy portfolio is coal, there are a number of hydro power plants (HPP) in the mix as well. There is an 870MW plant at Suki Kinari, 1100MW Kohala HPP and 720MW Karot HPP.
Let us take a look at the 720MW Karot HPP in this issue. The project is located on the Jhelum river with Azad Pattan HPP on its upstream, and Mangla HPP located downstream. Karot HPP will be a single power generation task hydropower complex with an expected reservoir capacity of close to 165 million cubic meters, whereas the installed capacity of the power plant will be 720MW. The average annual electricity output will approximately be 3174 GWh. The project is expected to incur a cost of $1.98 billion with a debt to equity ratio of 80:20.
The EPC stage generation tariff approved by NEPRA is 7.69 Rs/kWh with the project being built under the Build-Own-Operate-Transfer basis by the Karot Power Company, which is owned 93 percent by China Three Gorges South Asia Investment Limited (CSAIL). CSAIL is a special purpose vehicle owned by China Three Gorges Corporation (CTG) and the International Finance Corporation (IFC).
The latest project updates gathered from sources at the Planning Commission reveal that the Engineering, Procurement, and Construction (EPC) contractor has been selected and the EPC tariff petition has been submitted and decided by the regulator.
The implementation agreements with the federal and Azad Jammu and Kashmir (AJ&K) governments have been finalised to a great extent. The power purchase agreement is also nearing completion with the negotiations on direct agreements under way now.
As for land acquisition, the process has been substantially completed on the AJ&K side. On the Punjab side, the no objection certificate (NOC) for the forest land through which the access road will pass, has been issued. Additionally, land acquisition for reservoir area which held by both private and government parties is also in the final stages.
However, according to progress upgrades, the approval by banks and SINOSURE are taking time and need to be expedited. Moreover, the Punjab government needs to step up the pace on completing land acquisition on their side of the border.
The Economic Co-ordination Committee also needs to give its approval to the supplemental agreement so that the project can move ahead seamlessly. The project is expected to achieve financial close by August 2016 and the commercial operations date (COD) is set to be somewhere in 2020. Pending the early resolution of the above mentioned issues, officials believe they will be able to stick to the stipulated timeline for completion.