India has been instrumental in blocking financing of 350 MW Athmuqam hydropower plant in Neelum Valley, Azad Jammu and Kashmir after successfully blocking financing of the 4500 MW Diamar Bhasha Dam in Gilgit Baltistan, well informed sources in PPIB told Business Recorder. The sources said that 350MW raw-Site Athmuqam Hydropower Project was identified to be located on river Neelum (in the river stretch from Ashkot up to Dudhnial), AJK, in accordance with provisions of Policy for Power Generation Projects 2015 and issued Letter of Intent (LoI) on March 30, 2017 to a consortium of Korean investors comprising Korea Hydro & Nuclear Power Co, Limited-KHNP, DEALIM Industrial Co, Limited-DAELIM and LOTTE Engineering & Construction Co, Limited-LOTTE (collectively the sponsors) for development of the project.
The project site is located on River Neelum near Athmuqam town at a distance of about 210 km from Islamabad via Murree Muzaffarabad-Neelum Road. Further, the project site is about 310km from Islamabad via Abbottabad-Balakot-Muzaffarabad-Neelum road. The project area falls in the lower non-monsoon zone having altitudes in the range of 1200 to 1350 masl. The annual rainfall in this region is between 1500-1800 mm most of which falls during winters.
According to sources, KHNP is facing problems in arranging financial commitments from international institutions i.e. Asian Development Bank (ADB), International Finance Corporation (IDC) and World Bank due to consistent opposition by India to power projects in AJK. The sources maintained that feasibility study of the project is under preparation by the sponsors through their consultants namely M/s Lahmeyer International GmbH, M/s ISAN Korea & PES Pakistan, which was scheduled to be completed up to August 30, 2018 but India's opposition has delayed the feasibility study of Athmuqam hydropower project due to which the Korean company is exposing to penalties.
The Korea Hydro & Nuclear Power Co, sources said, has requested for remission of penalties as delay was due to force majeure. Few years back, the Government of Pakistan accused ADB of causing $2 billion loss to Pakistan in four years because of delays on 4,500-megawatt Diamer-Basha dam. The ADB had reversed its commitment of providing lead financing and support for Diamer-Bhasha dam after India expressed its reservations. AJK like Kashmir is disputed territory and any ADB/World Bank proposed project in these areas must first receive a no objection from the other government.
The sources said that Private Power & Infrastructure Board (PPIB) is expected to place the issue of penalty before the Board of Directors. PPIB has given extension to several power projects without penalty.