27 April 2015

Court China with care, tally up the costs & benefits

Khurram Husain
Apr 27 2015 

LET’S clear up some misconceptions that have been doing the rounds since President Xi Jinping dangled a $46-billion carrot before us. The money being offered is project financing, not aid and not concessionary loans. To get a good idea of what that means, take a look at one project that was approved and documents for which were signed during this visit: The Karot hydropower project.

Karot is a run-of-the-river hydropower project with a total generation capacity of 720MW. It is located on the river Jhelum, just south of Rawalpindi. The project was initiated in 2006, when a consortium of Associated Technologies (Pvt) Ltd and China Three Gorges International Corporation, the main sponsor of the project, applied for a Letter of Interest (LoI) from the Private Power Infrastructure Board (PPIB). The LoI was granted in early 2007. By 2009 a technical and financial feasibility study of the project had been completed by the project sponsors and approved by PPIB. Two years later, in 2011, the consortium applied for a generation tariff from Nepra, in which they detailed the technical and financial parameters.
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