AGL 41.00 Increased By ▲ 0.55 (1.36%)
AIRLINK 128.30 Decreased By ▼ -1.22 (-0.94%)
BOP 6.72 Decreased By ▼ -0.04 (-0.59%)
CNERGY 4.53 Increased By ▲ 0.41 (9.95%)
DCL 8.63 Decreased By ▼ -0.13 (-1.48%)
DFML 41.05 Decreased By ▼ -0.46 (-1.11%)
DGKC 87.12 Decreased By ▼ -0.90 (-1.02%)
FCCL 33.39 Decreased By ▼ -0.54 (-1.59%)
FFBL 65.40 Decreased By ▼ -0.82 (-1.24%)
FFL 10.45 Decreased By ▼ -0.18 (-1.69%)
HUBC 110.70 Decreased By ▼ -2.75 (-2.42%)
HUMNL 15.31 Decreased By ▼ -0.59 (-3.71%)
KEL 4.97 Increased By ▲ 0.13 (2.69%)
KOSM 7.44 Decreased By ▼ -0.17 (-2.23%)
MLCF 42.85 Decreased By ▼ -0.14 (-0.33%)
NBP 60.50 Decreased By ▼ -0.71 (-1.16%)
OGDC 195.25 Increased By ▲ 3.84 (2.01%)
PAEL 29.20 Increased By ▲ 2.34 (8.71%)
PIBTL 8.26 Increased By ▲ 1.00 (13.77%)
PPL 153.20 Increased By ▲ 3.13 (2.09%)
PRL 25.09 Increased By ▲ 0.01 (0.04%)
PTC 16.19 Decreased By ▼ -0.09 (-0.55%)
SEARL 78.45 Increased By ▲ 7.13 (10%)
TELE 7.34 Increased By ▲ 0.10 (1.38%)
TOMCL 36.05 Decreased By ▼ -0.16 (-0.44%)
TPLP 8.10 Increased By ▲ 0.10 (1.25%)
TREET 16.00 Decreased By ▼ -0.28 (-1.72%)
TRG 53.50 Increased By ▲ 1.89 (3.66%)
UNITY 26.75 Decreased By ▼ -0.49 (-1.8%)
WTL 1.28 Increased By ▲ 0.01 (0.79%)

ISLAMABAD: The federal government is reportedly weighing different options to finance Diamer Bhasha Hydropower Project as development partners are reluctant to commit financing of about $ 10 billion ($ 8 billion + $ 2 billion cost of transmission line), well informed sources in Ministry of Water Resources told Business Recorder.

This was the crux of inter-ministerial meeting, held on August 19, 2024 in Prime Minister House under the chairmanship of Minister for Economic Affairs and Establishment, Ahad Cheema.

Minister EAD shared some concerns expressed by members of the Federal Cabinet about the future viability of the Diamer Bhasha Dam Project, given its high financing requirements and delays in execution, especially since financial closure has not yet been achieved.

Diamer-Bhasha Dam: Site for construction made feasible by diverting direction of river, Senate body told

He noted the need for an in-house review before the government can take a decision on how to proceed further in this strategic project.

Federal Minister for Water Resources, Dr. Musadik Masood Malik mentioned that the total cost of the project is around $8 billion and the cost of transmission line will be added to this amount. He further highlighted the strategic importance of the project for the country’s water reserves.

Chairman WAPDA, Lt Gen Sajjad Ghani (Retd) gave a presentation on the project, mentioning the project’s benefits of water storage i.e. 6.4 MAF (million acre feet) and hydroelectricity that would be generated i.e. 18.l billion units annually.

On a query from the Minister for EAD/chair, the Chairman WAPDA responded that the cost per unit is Rs. 15, as per dollar rate of last year. He also mentioned that foreign financing needs, beyond the already arranged $500 million, are $3.5 billion, with equity of$1.2 billion and debt in foreign currency of$2.3 billion. He stated that Diamer Bhasha hydropower project is being financed out of WAPDA’S existing tariff revenue from hydropower generation, adding that only the cost of power generation component of the project would be recovered from consumers.

The Secretary EADD Kazim Niaz highlighted that development partners, for geo- strategic reasons, hesitated to committing financing for the project. Bilateral partners are, generally, reluctant to financing projects which require such a large amount of financing. However, he said recent efforts at the OPEC Fund’s Development Forum in June of 2024 yielded some positive results and a mission from the Saudi Fund for Development (SFD) is expected to visit the project in September.

“Once we have a foot in the door, then requests for funding may be made to Asian Infrastructure Investment Bank(AIIB) or China as well,” the sources quoted Secretary EAD as saying.

Federal Minister for Water Resources stated that if 6 per cent or even 3percent GDP growth annually is achieved per year for the next 10years and if already committed projects are not delayed Pakistan is likely to have surplus electricity.

He argued that if financial closure for the project is possible, he would support continuing with the project, notwithstanding the reputational cost if it is decided to slow down or not continue project execution.

Federal Minister for Power, Awais Leghari, stated that a feasibility study of the transmission line can be carried out soon so that the government has an exact idea of how much the total financing cost of the project would be, adding that not having a transmission line installed in time may result in additional costs.

After threadbare discussion, the meeting decided that a working group comprising representatives from WAPDA, Ministry of Water Resources and Power would be constituted which would give recommendations on how to proceed further with the project. The working group will give its recommendations within two weeks.

Copyright Business Recorder, 2024

Comments

Comments are closed.

KU Aug 24, 2024 09:38am
Well, what business community n people have been saying all along n fearing, is now an open secret. Future of country's survival n dams in hands of incompetent or some other interest?
thumb_up Recommended (0)
Mumtaz Malik Aug 24, 2024 04:46pm
It may be noted that Diamer-Bhasha Dam, on its completion, will store 8.1 MAF water to irrigate 1.23 million acres of land and generate 4500 megawatts,
thumb_up Recommended (0)
Mumtaz Malik Aug 24, 2024 04:47pm
Providing 18 billion units of green, clean and low-cost electricity to the national grid every year.
thumb_up Recommended (0)
Mumtaz Malik Aug 24, 2024 04:48pm
For the government of Pakistan, the Diamer Bhasha dam is integral to the country's green energy future, with hydropower playing a prominent role in its updated Nationally Determined Contribution.
thumb_up Recommended (0)
Mumtaz Malik Aug 24, 2024 04:49pm
Construction on the 4,800-megawatt plant began in June 2020, with an estimated completion cost of USD 14 billion.
thumb_up Recommended (0)
Mumtaz Malik Aug 24, 2024 04:50pm
The cost of 4500MW Diamir Bhasha Dam project has gone up by over Rs1000 billion from the initial estimated Rs894 billion to over Rs 1,936 billion.
thumb_up Recommended (0)
Arsalan Aug 24, 2024 08:01pm
Bring in Local/ Overseas Investors. they can easily take the load and won't expect their returns higher then any other donor/investor available. We have plenty of investors who would give in...
thumb_up Recommended (0)