ISLAMABAD: To overcome power shortages, the Asian Development Bank (ADB) has announced to give Pakistan $65 million assistance for a new private sector hydro power project in Pakistan.
ADB’s Private Sector Operations Department Investment Specialist Mohammed Azim Hashimi, in a statement, said that severe power shortages remain a major constraint on Pakistan’s economy, and scaling up the use of hydropower is essential for meeting demand and reducing the country’s reliance on costly imported fossil fuels for electricity production.
“This project also supports the Government of Pakistan’s policy of tapping the private sector for power industry investment”, a statement issued by the ADB here Monday quoted him as saying.
The loan will go to Mira Power Ltd, a special purpose company controlled by three Republic of Korea companies which will build and operate a run-of-river hydro power generating facility on the Poonch River in Kotli district, around 160 kilometers from Islamabad.
The project will be carried out on a build-own-operate-transfer basis over 30 years, with the electricity sold to the state-owned National Transmission and Despatch Company Limited under a take-or-pay power purchase agreement.
The special purpose company is majority-controlled by Korea South-East Power Co. Ltd. a subsidiary of listed Korea Electric Power Company, with other stakes held by units of the Daelim Business Conglomerate and Lotte.
The new facility will provide additional installed generating capacity of 102 megawatts, equivalent to almost 2% of the current power shortfall in the country.
