Suki Kinari hydropower project of 870MW achieves financial close

ISLAMABAD: The 870 megawatt Suki Kinari Hydropower Project, with the efforts and facilitation of the Private Power and Infrastructure Board (PPIB), achieved its financial close on Monday under the framework of China-Pakistan Economic Corridor (CPEC).

One of the largest private-sector hydropower projects of Pakistan, achieved financial close after fulfilling mandatory prerequisites. The documents were signed by PPIB Managing Director Shah Jahan Mirza and Suki Kinari hydropower project Chief Executive Haseeb Khan.

Federal minister for water and power Khwaja Muhammad Asif, who is also the PPIB chairman, witnessed the formal signing ceremony. While addressing media, he said that work on different power projects was underway to end load shedding in 2018. He said that Chashma-III nuclear power plant with 340MW generation capacity had become operational and Ch-IV would become operational in April this year.

However, load shedding would continue in areas where recovery of electricity bills was less, he said, and added that there was zero load-shedding in more than 200 feeders in Khyber Pakhtunkhwa. “Power theft is happening across Pakistan, and the government is taking measures to control it,” Asif said.

Suki Kinari is the first hydropower project in Khyber Pakhtunkhwa province, which is being developed by the private sector, and so far, the largest hydro independent power producer (IPP) in Pakistan.

The construction activities at the site of the project had already commenced and the project was expected to start injecting 3,081GWh million clean reliable and affordable units of electricity each year to the national grid by 2022.

Asif said that 2,793 canals of land had been purchased for the project and the project would be completed in 2022. A royalty of Rs1.3 billion would be paid to Khyber Pakhtunkhwa annually for water use, while after 30 years of operations on Build-Own-Operate-Transfer (BOOT) basis under the Power Policy 2002, the project would be transferred to the KP government at a notional price of Rs1.

The minister also said that Nandipur power project would be operational on gas in April this year. Responding to a question, Asif said that work on Diamer Bhasha dam had been divided in two parts - one was related to water storage and the second the powerhouse. He said that the government was trying to start work on the storage part from its own resources.

“The government had spent one billion dollars on procurement of land for Bhasha dam,” he said, and added that different countries had shown interest to invest in this dam and the construction work was expected to commence in the ongoing year.

Speaking of the Neelum-Jhelum hydropower project, the minister said it would be completed this year. He said that draft of the water policy would be moved to the Council of Common Interests (CCI) for approval.

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. This Project is being developed with an investment outlay of $1,800 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).

Suki Kinari project is located on the River Kunhar, a tributary of River Jhelum in Mansehra District in the eastern part of Khyber-Pakhtunkhwa between Naran and Paras towns.

Asif said this latest development reflected the federal government’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 hydropower projects would improve the availability of energy mix in the country and reduce dependence on imported fuel, resulting into savings of millions of dollars of precious foreign exchange annually.

The minister said the project would also be instrumental in generating economic activities, creating employment opportunities and improving basic infrastructure in the area that would be helpful in poverty alleviation.