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Govt seeks Chinese support for hydropower projects

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ISLAMABAD: Pakistan is engaging the Chinese leadership for the revival of more than 1800-megawatt of hydropower projects (HPPs) and investment from fresh Chinese companies in the country’s transmission and distribution network as part of the second phase of the China-Pakistan Economic Corridor (CPEC).

The authorities are trying their best to convene a meeting of the Joint Cooperation Committee (JCC) of the cabinet on May 22-23 so that Prime Minister Shehbaz Sharif’s upcoming visit to Beijing early next month will be a success.

A high-level delegation led by Planning Minister Ahsan Iqbal is currently in China to pursue existing investors and financial institutions and tap in more firms in transmission and distribution network as part of CPEC’s second phase.

Besides fresh investments in transmission projects, Pakistan wants Chinese firms to also enter the distribution sector as the government pushes for private sector participation, including through privatisation or long-term concession agreements.

The two major hydropower projects — 1,124 MW Kohala and 700 MW Azad Pattan — have been delayed for more than 18 months and the investors have not been able to achieve financial close because of insurance and financing difficulties emanating from more than $1.9bn worth of payables to existing power producers.

In this regard, the delegation that also included Prime Minister’s Special Assistant Tariq Fatemi, accompanied by Ambassador to China Khalil Hashmi met leaderships of three top companies and the National Energy Administration of China — a centralised energy planning, coordination and policymaking entity — on Thursday in Beijing.

An official statement said the Ahsan Iqbal-led delegation met three top Chinese companies specialising in power transmission and distribution.

The Chinese companies made presentations to the delegation, highlighting their expertise in power transmission and practical application of their expertise in other countries. The two sides “decided that Chinese experts will meet the Pakistani power sector officials visiting Beijing next week”.

In the meantime, Chinese companies would share a list of

questions to collect detailed data related to the power sector of Pakistan, which would allow them to provide informed advice to Pakistani officials.

Moreover, it was discussed that Chinese experts would also meet federal ministers for energy and petroleum, who would be visiting Beijing in the coming week.

After analysing necessary data and meetings with visiting Pakistani dignitaries, the Chinese companies would visit Pakistan to conduct further studies and meet relevant stakeholders. “This exercise will provide a solid base for the high-level talks between China and Pakistan early next month”, the statement said.

Separately, the delegation also met Zhang Jianghua, chairman of the National Energy Administration of China, and recalled that the Green Corridor, announced by Vice Premier He Lifeng during his visit to Pakistan a few months ago, was an important pillar of the second phase of CPEC.

The vision of Prime Minister Shehbaz Sharif’s government is to “revive the original momentum of CPEC project and has a deep commitment to the high-quality development of CPEC”.

The delegation told Mr Zhang that energy projects in the CPEC’s first phase had helped overcome power outages and that the government wanted to diversify the energy mix during the next phase of the corridor project to move towards clean and renewable energy.

Both sides discussed new initiatives to improve energy management system, aimed at reducing theft and line losses.

Pakistani delegation briefed the Chinese side on the steps taken by the government of Pakistan to enhance safety and security of the Chinese nationals on several projects in Pakistan.

Both sides also discussed diversifying the energy mix to produce electricity in the country. In that context, Mr Iqbal sought Chinese continued cooperation for the early implementation of the Azad Pattan and Kohala hydropower projects. The two sides agreed to hold the next round of the Joint Working Group meeting on Energy (JEWG) at an early date.

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