$7.5 billion CPEC hydropower projects may reduce Pakistan’s reliance on foreign fuel by 2026

A view of hydel power project under China-Pakistan Economic Corridor (CPEC) built on Jehlum river. (Photo courtesy: Chairman CPEC Authority Asiam Saleem Bajwa twitter)
Short Url
Updated 12 July 2020

$7.5 billion CPEC hydropower projects may reduce Pakistan’s reliance on foreign fuel by 2026

  • The hydropower projects in Pakistan-administered Kashmir are likely to create 8,000 jobs
  • China is constructing more than $20 billion worth of energy projects in Pakistan under the economic corridor arrangement

KARACHI: Pakistan’s plan to add four new hydropower projects with Chinese assistance at a cost of $7.5 billion in the next six years would reduce its reliance on oil and gas purchased from international market and lower its import bill substantially, officials and stakeholders said on Saturday.

The country recently signed an agreement with a transnational corporation, China Gezhouba Group, for the construction of Azad Pattan Hydropower Project for $1.5 billion under the second phase of China-Pakistan Economic Corridor (CPEC).

A tripartite agreement was also signed on June 25 for the construction of Kohala Hydropower Project.

The two power generation facilities will be built in Azad Jammu and Kashmir (AJK) and are going to produce 1,800 megawatts (MW) of clean energy after their completion in 2026. They are also expected to create 8,000 jobs, according to CPEC chairman Asim Saleem Bajwa. 

The projects will also benefit the Kashmir government since it will receive water use charges and take ownership of these plants after the completion of agreed terms.

“The government of Azad Kashmir will take over the projects after 30 years as per the agreement,” Sardar Naveed Sadiq, Chairman of Kashmir Board of Investment, told Arab News.

Two other hydropower projects, Karot and Suki Kinari, are scheduled to commence operations in December 2021 and December 2022, respectively. They are built at a cost of $3.65 billion and will produce 1,590 MW.

China is helping Pakistan with nearly 20 power sector projects worth more than $20 billion, according to the Private Power and Infrastructure Board (PPIB). Four of them have already started commercial production.

The country’s focus on hydropower generation has increased the share of this specific energy component in the overall mix from 25.8 percent to 31 percent this year, according to the latest Pakistan Economic Survey.

“Our initial focus was on coal but we are now focusing on hydel projects. The issues have been resolved and tripartite agreements of Kohala and Azad Pattan were recently signed,” Dr. Liaqat Ali Shah, CPEC’s project director, told Arab News.

“At present, we are generating surplus energy, but we have transmission problems,” he said, adding: “As we go forward and set up huge industries in Special Economic Zones, the demand for power will also surge. That should tell you why we need to increase our energy portfolio.”

Pakistan’s estimated hydropower generation capacity stands at 60,000 MW, though the country is only utilizing about 11,000 MW of that potential annually.

“The country’s power sector is deteriorating and desperately needs to be restructured. We can rapidly reduce 20 percent reliance on imported fuel, however, by making a few changes to it,” Khalid Faizi, international hydropower consultant and founder of Laraib Group, a stakeholder in the Azad Pattan Power Project, told Arab News.

“The production cost of the hydropower plant is Rs0.50 per unit while oil-base power generation costs Rs14 per unit of electricity,” he added. “No one can beat power generated through hydropower production in terms of its cost and Pakistan needs more projects like these.”

Faizi said the Azad Pattan Power Project would produce 3.3 billion kilowatt hour (kWh) electricity per year to meet about 5 percent of the country’s energy requirement of around 130 billion kWh.

“The life of hydro projects is usually around 200 years. The life of solar and wind power projects is somewhere around 25 years and coal power projects can last for 30 years,” he continued. “Pakistan needs to set up long term projects.”

“Dams are used for many purposes other than power generation. They can be helpful with irrigation and flood control. They can also provide wonderful picnic spots. They do require a significant initial investment but offer clean and affordable energy for a much longer tenure,” he added.


Emirates, Qatar Airways to bring home stranded PIA passengers of seized plane 

Updated 4 min 48 sec ago

Emirates, Qatar Airways to bring home stranded PIA passengers of seized plane 

  • On Friday, the Pakistan International Airlines Boeing 777 was held back in Malaysia over a $14 million legal dispute 
  • PIA said its legal team will pursue the matter with Pakistan government’s assistance

ISLAMABAD: The 172 passengers on board a PIA Boeing 777 aircraft that was impounded in Malaysia on Friday will be returning to Pakistan via Emirates and Qatar Airways flights on Saturday and Sunday respectively, a statement from the national carrier said.
On Friday, the Pakistan International Airlines plane was held back in Malaysia following a court order, the airline said, adding that the case involved a $14 million lease dispute underway in a British court.

Pakistan’s foreign office issued a statement on Friday saying its diplomatic mission in Malaysia was in close contact with relevant authorities over the detained plane and its stranded passengers. 
“PIA’s Kuala Lumpur flight’s passengers will reach Islamabad in the evening today (Saturday),” the PIA handout said, and added the PIA ground staff in Dubai and Doha were ensuring the stranded passengers were well taken care of.
Earlier, spokesman for the national carrier, Abdullah Khan, said the situation was “unacceptable” and that the airline’s legal team would pursue the matter with Pakistan’s official and diplomatic assistance. 

On Friday evening, Malaysia’s state news agency, Bernama, said the country’s Transport Ministry had opted to refrain from commenting on the impounded plane.
“It was reported that the Boeing 777 aircraft was seized after a court order and alternative arrangements were being made for passengers due to fly back to Pakistan,” the statement said.