" The Khyber Pakhtunkhwa government has approved the environmental impact assessment report of the project while submission of performance guarantee by the sponsors is under process, which will be completed shortly," official sources told APP.

The run-of-river project would be constructed at Kunhar River (a tributary of River Jehlum) in Mansehra and it would generate 840 MW hydel electricity.

The sources said that Private Power Infrastructure Board (PPIB) had issued a  letter of intent (LOI) to S.K. Hydro (Pvt). Ltd for the project on November  15, 2005.

The feasibility study of the project was completed and submitted to PPIB in Nov 2007 which was reviewed and approved on March 31,2008, they added.

The project was held up since January 2009 as the KP government was in court of law on certain constitutional issues.

The total cost of the project has been estimated at US $ 1.138 billion the sources said adding the project would have annual generation capacity of 2958 GWh while the tariff rate would be set at US Cents 6.33.

About 21.4 km headrace tunnel would be constructed for the run of the river project, the sources said.