CHINA Beijing resumes hydroelectric project in Pakistani Kashmir

This is the $2.5 billion Kohala Dam, which is planned to be built on the Jhelum River. In the coming days, Prime Minister Shehbaz Sharif will travel to China to give new impetus to other Chinese investment plans that have slowed down in recent years due, among other things, to the continuous attacks.

Islamabad (/Agencies) – With just a few days left before the official visit to China of the Prime Minister of Pakistan, Shehbaz Sharif, a Chinese company requested the reactivation of a hydroelectric project suspended for three years and presented a series of requests to the Pakistani government to advance investment plans. This is the $2.5 billion Kohala hydroelectric project, which should be built on the Jhelum River in the Pakistani Kashmir region.

Renewable energy projects are a key element of the China-Pakistan Economic Corridor (CPEC), but the China Export and Credit Insurance Corporation (Sinosure) was reluctant to provide coverage to the project due to dues of more than Rs 550 billion that Pakistani electricity companies should pay Chinese independent power producers.

However, during a meeting of the CPEC Joint Coordination Commission, Pakistan received a positive response from Chinese leaders, although the commitments are likely to be extended until 2027 and not until 2024, as initially planned.

Liu Yonggangma, CEO of Kohala Hydro Company (which is controlled by China Three Gorges Corporation), wrote to the responsible director of the Private Power Infrastructure Board – which is under Pakistan’s Ministry of Energy – explaining the situation and raising a number of issues.

Chinese and local workers and engineers were working at the site and preliminary construction activities had begun when the project was “unexpectedly halted by the Government of Kashmir due to environmental concerns wrongly associated with the Neelum-Jhelum hydropower project,” the letter said. . It subsequently took more than three years to resolve the issues raised by the Kashmir government, with consequent delays. Several investors have withdrawn from the project and there are still some pending issues, but – Liu Yonggangma continued – China Three Gorges Corporation intends to obtain financing of 2.5 billion dollars and obtain insurance coverage from Sinosure, for which it needs a three-year extension. He adds that despite adverse macroeconomic conditions, the company remains “firmly committed to taking the project forward.”

Chinese projects in Pakistan do not have an easy life: a few days ago Pakistani authorities arrested eleven militants accused of being involved in a suicide attack against Chinese engineers. After the arrests, Beijing asked Islamabad to continue the investigation. Chinese Foreign Ministry spokesman Mao Ning said Monday that China attaches great importance to the progress made by Pakistan, which in turn announced it would pay $2.58 million to the victims of the attack. The attack took place on March 26 against a group of workers heading to the Dasu Dam in Khyber Pakhtunkhwa province. Growing security threats have forced Pakistani officials to tighten security protocols and require Chinese citizens to report their home addresses and movements within the country.

With Prime Minister Sharif’s visit to China, cash-strapped Pakistan hopes to push forward the other CPEC projects that have faced delays in recent years.