China Three Gorges seeks IFC financing for hydropower project in Pakistan

China Three Gorges Corporation is seeking IFC financing for the 720-MW Karot hydropower plant in Pakistan. The proposed IFC investment is for up to US$100 million A Loan for IFC’s own account.

The total project cost is currently estimated at US$2 billion and is expected to be funded with 20 percent equity (US$400 million) and 80 percent debt (US$1,600 million). The debt financing for the project is expected to be provided by a consortium of Chinese lenders and IFC.

The project sponsor, CSAIL, was established by China Three Gorges Corporatiom (CTGC), through its wholly-owned overseas intermediary, China Three Gorges Investments (CTGI), previously known as CWE Investment Corporation (CWEI). Established in September 2011, CSAIL serves as the dedicated platform company for CTGC’s power sector investments in Pakistan. In November 2014, IFC committed an equity investment of up to US$125 million in CSAIL. CSAIL has a 93 percent shareholding in the company.

CSAIL hired an EPC consortium including Yangtze Three Gorges Technology & Economic Development Co. and China Machinery Engineering Corp. to develop the plant that includes an underground powerhouse and will generate electricity from four 183-MW Francis turbine units.

Work on the Karot facility is expected to start by the end of 2015, with completion by 2020. Energy generated at the plant will be sold to the National Transmission and Dispatch Company under a 30-year power purchase agreement (PPA). The project is expected to generate 3,436 GWh annually.

The project is being developed under the Power Policy 2002 on a build-own-operate-transfer basis, with an expected concession period of about 35 years (5 years of construction, 30 years of operation).