Chinese Three Gorges Company to invest $2.4 billion in Kohala Hydel Power Project

Islamabad: Chinese Three Gorges Company will invest  $2.4 billion to build 1124 megawatt ‘Kohala Hydel Power Project- Implementation and Water Usage’ projects under the multi-billion-dollar China-Pakistan Economic Corridor (CPEC).

The government of Azad Jammu and Kashmir (AJK), and Chinese Three Gorges Company signed agreements in this regard.

“The project would attract a foreign investment of $2.4 billion under the umbrella of CPEC,” said CPEC Authority Chairman Lieutenant General Asim Saleem Bajwa (retd) in a social media statement.

“Signing ceremony for 1124 MW Kohala Hydel Power Project- Implementation and Water Usage Agreements held between AJK Government and China Three Gorges Company,” he added.

AJK Prime Minister Raja Farooq Haider, Federal Minister of Energy Hammad Azhar, and others officials were present on the occasion.

The Kohala Hydropower Project is a proposed run-of-the-river, high head project will be located near Kohala, in AJK. The agreement for the project was finalised in 2020 and later it was formally signed in a ceremony attended by Pakistani Prime Minister, and Chinese ambassador.

China Three Gorges Corporation (CTGC), the state-owned hydropower developer, had won the right to develop a hydroelectric dam in Pakistan on January 7, 2015. It will be Chinese company’s largest investment in Pakistan.

The Kohala Hydro Project is located on the Jhelum River near Muzaffarabad District. The dam site is proposed just upstream of Domel, 174 kilometres from Islamabad and will have an installed capacity of more than 1,100MW.

The average annual energy generation of the main power station will be 5.079 billion kWh. The project is part of the CPEC under the Belt and Road Initiative (BRI).

In 2007, a feasibility study, preparing the Kohala hydro power project, was conducted by international consulting companies. In 2008, a Memorandum of Understanding (MoU) for implementing the project, was signed in Beijing between the Ministry of Water and Power of Pakistan and the China International Water and Electric Corporation (CWE), a subsidiary of China Three Gorges Corporation. But it took until 2015 for the Private Power and Infrastructure Board (PPIB) to issue a Letter of Support for the project. Since 2014 the Project is listed as “Actively Promoted Project” under the CPEC.

National Electric Power Regulatory Authority (NEPRA) approved on April 9, 2015 the stage price of 7.2365/kwh.

The Kohala Hydro Company (Pvt.) Limited was incorporated in 2015 and is responsible for executing the Kohala Hydropower Project. The company belongs to China Three Gorges South Asia Investment Ltd., a company established in 2011 on the Cayman Islands.

The shareholders of China Three Gorges South Asia Investment Ltd., include China Three Gorges Corporation (with 70 percent) – who formed it – the Silk Road Fund (with 15 percent) and International Finance Corporation (with 15 percent).

The China Three Gorges South Asia Investment is involved in multiple CPEC projects, such as the Three Gorges Second and Third Wind Farm and the Karot Hydro Power Plant. After 30 years of operation the power station will be transferred to Pakistan free of charge.

The China Three Gorges South Asia Investment Limited is the main sponsor of the Kohala Hydropower Project. Sinosure insures the project, like almost all other CPEC projects.