China Three Gorges Corporation (CTGC) announced today, it will develop the planned 1,100-MW Kohala hydropower project, a run-of-river scheme that will be built on the Jhelum River in Azad-Jammu-Kashmir (AJK).
Pakistan's Water and Power Development Authority (WPDA) owns the project, scheduled for commissioning in 2023.
AJK is a self-governing administrative division of Pakistan west of the Indian-administered state of Jammu and Kashmir.
In 2014, Pakistan’s National Transmission and Dispatch Co. and China International Water and Electric Corp. (CWE) -- a subsidiary of CTGC -- finalized a 30-year tariff at 7.9 cents per unit and estimate the project will cost about US$2.4 billion.
The Kohala hydroelectric scheme will have a gravity, roller-compacted-concrete dam on the upper branch of the Jhelum, 40 km from Muzaffarabad. The powerhouse, on the lower branch of the Jhelum near Barasala, will house four 275-MW Pelton turbines.
CWE is required to construct the project on a build, own, operate and transfer basis. In 2014, local published reports said the average tariff for the first 12 years was set at 8.9 cents per unit and during the following 18 years would be 5.1 cents per unit. The average tariff for the 30-year life of the project is 7.9 cents per unit.
The tariff ensures 17 per cent return on equity on internal rate of return basis. The project is expected to earn carbon credit from the United Nations Framework Convention on Climate Change for clean energy development under the Kyoto protocol.
CTGC said the Kohala project is its largest investment in the Pakistani hydropower market.
The project is part of the China-Pakistan Economic Corridor, a 3,000-km-long network of roads, railways and energy infrastructure to assist development in Pakistan and boost growth for the Chinese-border economy.
WPDA issued a supporting letter for the project the week of Dec. 19.