Minister for Water and Power Khawaja Asif said on Monday that several countries have expressed interest in financing 4500MW Diamer Basha Dam. Talking to the media he said land acquisition for the project has been completed, and the project has been divided into two phases - water reservoir and power house.
He expressed the confidence that work on Diamer Basha Dam will start during the current year, adding that Government of Pakistan would pay compensation of land from its own resources and a donor will be arranged for the construction of the power house. In reply to another question, he said that 969 MW Neelum Jhelum project would be made operational during the current year. The cost of the project would touch Rs 500 billion as Water and Power Ministry would submit a summary to the ECC for approval of increase in cost and continuation of surcharge of 10 paisa per unit for another one and half years.
Responding to a question, the Minister said water policy will be taken to the council of common interests for approval. Regarding elimination of load shedding by 2018, Minister for Water and Power said that the commitment would be honoured. Khawaja Asif avoided commenting on controversy of Indus Water Treaty (IWT) with India and the role of the World Bank.
Earlier, an agreement regarding financial close of Suki Kinari hydropower project was signed during a ceremony. Tariff of the project is 8.8145 cents/ KWh for 30 years at 2013 level cost as per Nepra second stage tariff. China Gezhouba Group Company Limited has been selected as EPC Contractor through International Competitive Bidding (ICB). According to an official statement with the efforts and facilitation of Private Power and Infrastructure Board (PPIB), Pakistan has achieved another landmark by declaring Financial Close of first hydro IPP under the framework of China-Pakistan Economic Corridor (CPEC). 870 MW Suki Kinari Hydropower Project achieved Financial Close after fulfilling mandatory prerequisites. The documents have been executed by Mr Shah Jahan Mirza, Managing Director, PPIB and Haseeb Khan, Chief Executive of Suki Kinari Hydropower Project.
This is the first hydro power project in Khyber Pakhtunkhwa Province 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 GWh 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 - Rs 1.3 billion - per annum as water use charges, while after thirty 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.
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. M/s Al-Jomaih Holding Company, (LLC) (Saudi Arabia), China Gezhouba Group Company (China) and Haseeb Khan (Pvt) Ltd (Pakistan) are Sponsors of the Project. Suki Kinari Project is being developed with an investment outlay of US $1800 Million through Debt Equity ratio of 75:25%. The lenders for the Project include Export-Import Bank of China, and Industrial and Commercial Bank of China (ICBC).
Minister for Water and Power stated that this latest development reflects GoP'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 will improve energy mix in the country and reduce dependence on imported fuel resulting in saving of millions of dollars of precious foreign exchange annually. The establishment of this project will also be instrumental in generating economic activities as well as creating employment opportunities for the people of the areas in particular and will also entail improvement of the basic infrastructure in the vicinity which will be helpful in poverty alleviation.
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