China funds key Pakistani hydropower project

Project will generate much-needed low-cost hydro power electricity.

The Export-Import Bank of China or China Exim Bank signed an agreement with Pakistan to provide US$448 million for the strategically important 969MW Neelum Jhelum hydropower project.

Pakistan said this agreement is a significant development in efforts to secure the necessary financial resources for the remaining works of the project. The Neelum Jhelum Hydropower project is being constructed on River Neelum in Azad Jammu and Kashmir.

The project is also important for Pakistan to establish priority water rights. The government is, therefore, sparing no effort to complete the project by 2016.

When completed, the project will contribute 5.15 billion units of cheap electricity every year to the national grid.

The Neelum–Jhelum Hydropower Plant is part of an under construction run-of-the-river hydroelectric power scheme designed to divert water from the Neelum River to a power station on the Jhelum River.

The power station is located in Azad Kashmir and will have an installed capacity of 969 MW. Construction on the project began in 2008 after a Chinese consortium was awarded the construction contract in July 2007.

China Exim Bank is one of three institutional banks in China chartered to implement state policies in industry, foreign trade, diplomacy, economy and provide policy financial support to promote the export of Chinese products and services.