ISLAMABAD: The Private Power Infrastructure Board (PPIB) has convened a meeting on Friday (tomorrow) to review progress on “unmoving” 770.7 MW Azad Pattan Hydropower Project at River Jhelum (AJ&K and Punjab), being developed by a Chinese company.
Azad Pattan Power Pvt Limited (APPL), is a subsidiary of China Gezhouba Group. The Letter of Support (LoS) issued by PPIB requires achievement of Financial Closing (FC) of the project by December 31, 2024. According to Managing Director PPIB, it was observed that the project is not moving ahead since long, therefore, in order to review progress with reference to issues, bottlenecks and possible way forward there is a need for discussion by the stakeholders.
In December 2023, in a letter to Managing Director, PPIB, Shah Jahan Mirza, APPL’s Chief Executive Officer, Wang Xiaoming referred to two previous letters, written on May 30, 2023 and June 9, 2023 regarding exemption/waiver of fee for extension in Financial Close (FC) date under the Letter of Support (LoS), in accordance with the criteria per amended Rule 3A of the PPIB (Fee and Charges) Rules 2018, as approved by the PPIB Board.
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The company also drew attention of PPIB to the following facts: (i) under the China-Pakistan Economic Framework (CPEC) Framework Agreement, all CPEC energy projects (including hydropower), part of the “strategic cooperation” between China and Pakistan, have been classified as “strategic projects” by the respective governments; (ii) Pakistan’s National Water Policy, under the “Strategic Priorities and Planning Principles”, has classified water, energy (hydropower) and food security as “strategic projects” as they are of “critical importance” to the water and energy security of Pakistan; (iii) hydropower projects are classified as “strategic projects” under Pakistan’s strategic plans to replace imported fuel-based power generation, amongst others, with indigenous hydropower; (iv) under the Indus Water Treaty 1960, first use of water resources through construction of hydropower projects and/or agriculture use are essential to preserve Pakistan’s strategic water rights and are thus classified as “strategic projects”; and (v) the reserved forest land acquired for the project pursuant to Section 27(3) of the Punjab Forest (Amendment) Act, 2016, can only be used or acquired by an organization for purposes of a “national project of strategic importance”.
Chinese company argued that the project fully qualifies as a strategic project, meets all the criteria provided under the Rules and accordingly is entitled for a fee waiver for extension in FC date under the LoS.
The 700.7 MW Azad Pattan Hydropower Project, located on River Jhelum at dual boundary between AJ&K and Punjab is being developed under provisions of Government of Pakistan (GoP) Policy for Power Generation Projects 2002 by APPL comprising of China Gezhouba Group as the sponsors. The project is included in the NEPRA-approved Indicative Generation Capacity Expansion Plan (IGCEP) 2021-30 and is part of the China Pakistan Economic Corridor programme. Chinese insurance company Sinosure provided insurance cover to the project, after high level interactions at the government level, as initially it refused to extend insurance cover due to Pakistan’s gigantic power circular debt and non-payments issue facing Chinese projects.
Copyright Business Recorder, 2024
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