KARACHI: International Finance Corporation (IFC), a member of the World Bank Group, is investing $100 million in the landmark 720MW Karot run-of-river hydropower project in Pakistan to help overcome severe power shortage and spur growth, a statement said on Tuesday.
IFC’s support for the $1.7 billion project on the River Jhelum, which has now reached its financial close, marks the IFC’s first project finance engagement with China Three Gorges Corporation (CTGC), one of the world’s largest renewable power companies.
In 2015, IFC acquired a 15 percent stake in China Three Gorges South Asia Investment Limited, CTGC’s renewable energy platform company in Pakistan, to help develop a series of renewable energy projects in Pakistan that are expected to provide electricity to more than 11 million people.
Pakistan has been suffering from a severe power deficit, resulting in load-shedding of over six hours/day on an average, hampering the country’s economic growth and development.
The Karot plant, which should be operational in five years, is expected to generate 2,970 gigawatt-hours of net energy annually, providing affordable, clean power to around three million residential customers, the statement added.
“Improving access to electricity in Pakistan is a priority for the IFC and the World Bank Group, and we are pleased to see the Karot project advance,” said Bernard Sheahan, IFC global director for Infrastructure and Natural Resources.
“Our priority has been to support the sponsor and the company in the project’s development by strengthening their environmental, social and corporate governance capabilities, to ensure power is delivered sustainably,” he added.
Pakistan represents IFC’s second-largest engagement in the Middle East and North Africa Region, with over $5.6 billion in cumulative investments committed to-date.
IFC is supporting a number of hydropower plants in the Jhelum-Poonch Watershed, totalling some 2,750MW. This has been complemented by the advisory work supporting river basin management and biodiversity risk mitigation.
Karot is IFC’s largest hydroelectric power project to-date and represents IFC’s first major collaboration with the China Export Import Bank, China Development Bank, and Silk Road Fund.
IFC was able to bring its considerable Pakistan experience and global project finance expertise to help finalise the deal. The project is a major contribution to the joint World Bank Group Transformational Energy Initiative and Joint Implementation Plan in Pakistan, which aims at mobilising $10 billion in new generation investments to address Pakistan’s acute power shortage and improve sector sustainability.
According to project’s official information, Karot hydropower project is the fourth of the five cascade hydropower stations planned on River Jhelum in Pakistan, its upstream is the Azad Pattan HPP, and its downstream is the Mangla HPP.
The project is a single power generation task hydropower complex, with reservoir storage of 164.50 million m3. Its installed capacity is 720MW (4×180MW). The is designed exclusively for power generation under Build Own Operate Transfer (BOOT) basis with a concession period of 30 years.
It has an asphalt core rock-fill dam of 95.5 m height, a separate spillway, intake structure, 3 diversion tunnels, 4 power tunnels and a surface power house. IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets.
Working with 2,000 businesses worldwide, IFC uses six decades of experience to create opportunity where it is needed the most. In FY16, the long-term investments in developing countries rose to nearly $19 billion, leveraging our capital, expertise and influence to help the private sector end extreme poverty and boost shared prosperity.