Agreement signed for $1.9B Pakistani hydropower project
Pakistan’s Khyber Pakhtunkhwa government has signed an agreement with SK Hydro, the special purpose vehicle (SPV) established to carry out the project, and Industrial & Commercial Bank of China to develop the 870 MW Suki Kinari hydropower project on Kaghan Valley in Mansehra District of the Khyber Pakhtunkwa Province (Pakistan).
Under the terms of the agreement, after a 30 year period of operation, the hydropower plant will be handed over to the Khyber Pakhtunkhwa government. The project sponsors for SK Hydro include the following:
- White Crystals Limited, wholly owned company of Al Jomaih, Saudi Arabia - Main Sponsor
- China Gezhouba Group International Engineering Company Limited
- Eden Inc. Berhad, Malaysia
- Haseeb Khan, FCA, Pakistan
The total project investment is estimated at US1.9 billion and construction works are expected to be finished within five years. The project will sell all power generated to the Pakistani government under a 30-year power purchase agreement (PPA).
The project is being supported by Export-Import Bank of China and Industrial and Commerce Bank of China Ltd. (ICBC). SK Hydro signed a facilities agreement with the lenders for full 75% of debt portion on April 20, 2015. SK Hydro has also signed a engineering, procurement and construction (EPC) contract with China Gezhouba Group Company.
The project is one of the largest private sector hydropower initiatives in Pakistan. Designed to produce 3050 GWh annually, this mega project alone is expected to substantially increase Pakistan’s existing available power generation capacity.
As a run-of-the-river hydroelectricity (ROR) project, it comprises minimal environmental and social impacts. Additionally, it is one of the most cost effective hydropower schemes in the region due to its high design head of 900 m and relatively short Intake Structure crest.
