Islamabad 25, June 2020
SECURITY PACKAGE AGREEMENTS FOR 1,124 MW KOHALA HYDROPOWER PROJECT SIGNED
ISLAMABAD, 25th June 2020: In a major breakthrough towards implementation of 1,124 MW Kohala Hydropower Project, the Project Agreements of the Kohala Hydropower have been signed today in Prime Minister’s Office. The Ceremony was graced by the Honorable Prime Minister of Pakistan Imran Khan and the Honorable Prime Minister of Azad State of Jammu and Kashmir (AJ&K) Raja Muhammad Farooq Haider Khan while Minister for Power, Omar Ayub Khan, Special Assistant to Prime Minister on Information and Broadcasting/Chairman CPEC Authority, Lt. Gen (R) Asim Saleem Bajwa, Honorable Ambassador of Peoples Republic of China in Pakistan Yao Jin, Honorable Ministers for Planning & Development, Economic Affairs Division, Science & Technology, Water Resources, Information and Broadcasting, Maritime, Kashmir Affairs & Gilgit-Baltistan, Secretary Power Division Irfan Ali, Chief Secretary AJ&K, Mathar Niaz Rana, MD Private Power & Infrastructure Board (PPIB) Shah Jahan Mirza, CEO Central Power Purchasing Agency Guarantee Limited (CPPA-G) Waseem Mukhtar, MD National Transmission and Despatch Company (NTDC) Khawaja Riffat Hassan, Chief Executive Officer of Kohala Hydro Company Private Limited (KHCL) Zhang Jun, senior officers of GoAJ&K, Ministry of Energy (Power Division), PPIB, CPEC Authority besides other high level officials representing the GoP, AJ&K and the Kohala Project were also present.
The GoP Implementation Agreement (GoP IA) of the Project was signed by Shah Jahan Mirza MD PPIB. Similarly, Tripartite Power Purchase Agreement (TPPA) was signed by Waseem Mukhtar, CEO CPPA-G and Khwaja Riffat Hussain, MD NTDC while Tripartite Agreement (TPA) was signed by Irfan Ali, Federal Secretary (Power Division) and Mr. Mathar Niaz Rana, Chief Secretary AJ&K. On behlf of the Kohala project, all three agreements were signed by Zhang Jun, CEO of KHCL. This latest development has paved the way for achievement of Financial Close which PPIB is targeting to be achieved by 30th June 2021.
The 1124 MW Run-off-the-River Kohala Hydro Power Project under the China Pakistan Economic Corridor (CPEC) is the largest foreign direct investment in any IPP of the country and also in AJ&K. Located in the north-east region of the country, the project is planned to be built in the Azad Jammu and Kashmir, on River Jhelum that flows into Azad Jammu and Kashmir. Weir/Dam site is located in village Siran (near Hattian, District Jhelum valley) while Power House is in village Barsala (near Kohala Bridge, District Muzaffarabad). 1,124 MW Kohala Hydropower Project is being developed by Kohala Hydropower Company Private Limited with China Three Gorges Corporation, IFC and Silk Road Fund as sponsors of the Project while China Development Bank and Habib Bank Limited are the Lenders of this project.
Kohala Project is being implemented by PPIB under the Policy for Power Generation Projects 2002 on a built, own, operate and transfer (BOOT) basis for a term of 30 years after which it will be transferred to the GoAJ&K at a notional cost of PKR 1 only. The project will not only bring in valuable foreign direct investment of 2.4 billion US Dollars but will generate cheap and clean energy of about 5,000 GWh per year to the national gird by June 2026. The Project will also play crucial role in stimulating local economy by providing employment opportunities during its construction period as well as the GoAJ&K will earn significant amount of revenue on account of taxes, fee etc while during operation period, it will also receive water use charges amounting approximately Rs. 2.25 billion every year.
Speaking on the occasion, the Honorable Minister for Power lauded the combined efforts of Power Division, PPIB, CPEC Authority, the GoAJ&K, project sponsors and all other stakeholders in resolving the pending issues which were hampering progress on this strategically important project and bringing the project to an advance stage.
The Honorable Prime Minister commended the hard work of all players involved in implementation of this project of national importance for achieving this milestone and emphasized on promoting indigenous and renewable potential for future power generation. The Prime Minister assured full support of the government in implementing pipeline power generation projects including the 1124 MW Kohala Hydropower Project as well as other projects of CTG Group in Pakistan and expressed his belief that with proven track record of CTG/CSAIL, the Kohala project will be completed timely.