Islamabad 01, December 2020

PROJECT AGREEMENTS INKED FOR 700.7 MW HYDROPOWER PROJECT UNDER CPEC

ISLAMABAD, 1st December 2020: Agreements signed today for construction of Azad Pattan Hydropower Project as part of the China-Pakistan Economic Corridor (CPEC). With an investment of over 1.35 billion dollars and 700.7 megawatts of electricity, the Azad Pattan Project will involve no fuel import, enabling the country to move towards cheaper and greener power generation. The Honorable Prime Minister of Azad Jammu and Kashmir Raja Muhammad Farooq Haider Khan, Federal Minister for Power Omer Ayub Khan, Federal Minister for Planning Asad Umar, Chairman CPEC Authority, Lt. Gen (R) Asim Saleem Bajwa, Chief Secretary AJ&K Dr. Shahzad Khan Bangash, Managing Director Private Power and Infrastructure Board (PPIB) Shah Jahan Mirza, federal and provincial ministers, and others attended the ceremony.

The project agreements comprising GoAJ&K Implementation Agreement (GoAJ&K IA) and GoAJ&K Water Use Agreement (GoAJ&K WUA) were signed by Mr. Zafar Mahmood Khan, Secretary Electricity AJ&K and Mr. Li Xiaotao, CEO of Azad Pattan Power Private Limited. The Government of Pakistan Implementation Agreement, Government of Punjab Water Use Agreement and Tripartite Power Purchase Agreements of the Project had already been signed in the presence of the Prime Minister of Pakistan in July this year. Today’s development will further pave the way for achievement of Financial Close of the Project.

Letter of Support (LOS) was issued by PPIB to Azad Pattan HPP which is a Run-off-the River Scheme on River Jhelum located at dual boundary between AJ&K (District Bagh) and Punjab (District Rawalpindi). China Gezhouba Group and Laraib Group Pakistan are the shareholders of the Project. The consortium of lenders consists of China Development Bank, China Construction Bank, Industrial & Commercial Bank of China and Bank of China. Azad Pattan Project is being implemented by PPIB under the Policy for Power Generation Projects 2002 on built, own, operate and transfer (BOOT) basis for a term of 30 years after which it will be transferred to the GoAJ&K free of cost. The project while bringing in valuable foreign direct investment, will provide energy of about 3,266 GWh per year to the national grid by 2027.

The Project also will play crucial role in stimulating local economy by providing employment and business opportunities during its construction periods. Furthermore, the Governments of AJ&K and Punjab will earn significant amount of revenue on account of taxes, fees, etc while during operation period water use charges of approx. PKR 1.4 billion would be shared equally by both governments on annual basis. Moreover after completion of construction work, tourism activities around reservoir/lake and water sports, fishing etc. are also associated avenues for earning valuable revenue.

The participants of the signing ceremony appreciated the efforts of PPIB for efficient processing of hydropower projects including the Azad Pattan Hydropower Project and urged to continue facilitating investors in the same run for achieving optimum results. Azad Pattan is a part of the fleet of four hydropower projects being processed by PPIB under the CPEC banner out of which 720 MW Karot and 884 MW Suki Kinari hydropower projects are under construction while 1124 MW Kohala project is under Financial Closing.