Kohala Hydropower Project: Chinese co urges Pakistan govt to extend LoS
ISLAMABAD: Chinese company M/s Kohala Hydropower Company Limited (KHCL) has requested the government to formally issue a notification extending the Letter of Support (LoS) for the $2.5 billion, 1,124 MW run-of-the-river Kohala Hydropower Project until September 30, 2027 as it has fulfilled all requisite formalities, sources within the company told Business Recorder.
The Kohala Hydropower Project is a priority initiative under the China-Pakistan Economic Corridor (CPEC) framework. The original LoS was issued by the Private Power and Infrastructure Board (PPIB) on December 31, 2015, facilitating the successful negotiation and execution of key project agreements.
Subsequently, the LoS validity was extended until September 30, 2027, as per the decision taken during the 144th meeting of the PPIB Board.
LoS extension stays pending: Chinese firm agrees to delay Kohala project
The Power Company in a letter to Power Division, has claimed that in compliance with the conditions precedent has submitted the requisite Performance / Bank Guarantee of $ 5.62 million to enable formal notification of extension in the LoS.
According to the letter the Company has legitimate expectations for, issuance of extension in the LoS, premised on the following grounds :(i) the Project is being developed under CPEC Framework Agreement of November 08, 2014 between Government of China and Government of Pakistan, GoP's Power Generation Policy, 2002 and the AJ&K Power Generation Policy, 2002, reflecting its strategic significance and multi-jurisdictional transnational character; and (ii) the Company has executed all principal project agreements, including, Implementation Agreement (IA) with the Government of Pakistan on May 6, 2021, Tripartite Power Purchase Agreement (TPPA) with CPPA-G and NTDC on June 25, 2020, AJ&K Implementation Agreement (AJ&K IA) and Water Use Agreement (WUA) with the Government of AJ&K, on April 23, 2020; and Tripartite Agreement (TPA) between the Company, Government of Pakistan and Government of AJ&K on Jun 25, 2020.
The Company has acquired approximately 4,607 Kanals of land for public purpose in connection with the Project's development, including activities related to financing, engineering, procurement, construction, operation, and maintenance on a Build-Own -Operate-Transfer (BOOT) basis. Compensation has been fully paid to the affected population in accordance with applicable laws.
The Power firm further stated that as per the assumptions of the IGCEP 2022-2031 (Section 5.2) which were duly approved by the Council of Common Interests (CCI), a project is considered as 'committed' if it has obtained LoS from PPIB as of December 2020 for private sector projects and/or power generation projects which are listed under Federal Government's international bilateral or multilateral commitments
The Project, in view of the specified criteria, is categorized as 'Committed Project' under the applicable and valid IGCEP 2022 - 2031, which stands duly approved by the NEPRA Authority through determination of February 1, 2023.
The NEPRA Authority in its findings' in the approved IGCEP noted that emphasis has been placed on utilization of indigenous resources whereby more than 77% of the installed capacity will be based on the said sources. The NEPRA Authority further 'directed' the stakeholders that in the changing global dynamic there is a need to even further increase the use of indigenous resources of energy and same are made on priority.
China Three Gorges argues that the Project has valid authorizations, approvals and consents, from the Government of China, Government of AJ&K and Government of Pakistan, to proceed under and pursuant to the Legal Framework and Contractual Framework.
After explaining the background, the Chief Executive Officer of Kohala Hydropower Company, Liu Yonggang has submitted that the Project is fully compliant with and aligned to policy perspectives, contractual terms, and regulatory framework. Accordingly, the Project has satisfied all the conditions precedent for further advancement and development.
'We earnestly seek the esteemed support from Power Division in facilitating the prompt issuance of the formal notification for the extension of the LoS by PPIB until September 30, 2027. This timely action is pivotal to ensuring the uninterrupted progress of the $ 2.5 billion investment by China Three Gorges in the Kohala Hydropower Project-one of the most strategically important initiatives under the CPEC framework,' said the CEO.
On October 4, 2024, Managing Director PPIB, Shah Jahan Mirza, through a letter informed the CEO of the Company that the Company's request regarding extension in the Financial Closing (FC) date of LoS of 1124 MW Kohala Hydropower Project was considered by PPIB Board in its 144th meeting held on September 18,2024. The Board decided to extend the FC date in the LoS of the project for 36 months period i.e. up to September 30, 2027 subject to extension of existing Bank Guarantee three months beyond the extended validity date of the LoS.
MD PPIB had advised the CEO Kohala Hydropower Company to extend the validity of the banks guarantee up to December 31, 2027 and submit detailed bar chart identifying major milestones and timelines of various activities to be carried out up to FC i.e. September 30, 2027.
Copyright Business Recorder, 2025
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
19 hours ago
- Express Tribune
'Budget deepening inequality'
Listen to article After the federal budget, ordinary citizens face growing financial pressure while the elite continue to enjoy privileges, economic nationalists said. They criticised the 2025-2026 federal budget as a collection of unrealistic ambitions and contradictions, claiming it has failed to offer meaningful relief for the public. According to them, the budget is full of unrealistic ambitions and contradictions. It has failed to provide any substantial relief in essential areas such as poverty eradication, job creation, healthcare, and education. Instead, a series of new direct and indirect taxes has made basic necessitiesincluding flour, cooking oil, tea, and milkmore expensive. They fear that rather than alleviating poverty, the budget is likely to further increase the miseries of common people. Thus, the nation's wealth is being further diverted toward the privileged class — affluent businessmen, influential manufacturers, and manipulated chambers, who may have big visions, but not big hearts for the common people. They said solar energy has become a public good providing much needed relief to common people who have been under the onslaught of unbearable utility bills. Ironically, the current budget has imposed a new 18 % tax on solar panels thus producing a new killing blow to common people further marginalising their lives, funds and savings alike. Despite the government's tall claims, the gap between the state and society continues to widen, inching toward social unrest. The political capital of the incumbent government is under serious threat. High inflation, rising prices, new levies on petroleum products, and fresh taxes on solar panels have together become a draconian nightmare for common people. Speaking about the federal budget beyond numbers highlighting a common man perspective, economic strategist and regional expert Dr Mehmoodul Hassan Khan said, elitist economics is creating ripples in the lives of common people in the country because of its immense and unbridled political cartelisation and so-called democratic cronies in the shape of members of provincial assemblies (MPAs), members of national assembly (MNAs) and ministers whose salaries and other associated benefits have unnecessarily been further increased, while giving a wrong message. Consequently, social activists and liberals have termed so-called political messiahs as mafias who are eroding national exchequer for their own whims-cum-wishes. Additionally, the federal finance minister did not have any justification of this increase because being a member of the national assembly salary of these legislators has been enhanced every year on a regular basis. Thus the Finance minister seems to be compromised before its political fraternity, he added. "Initiation of people's friendly programmes and projects in terms of social development at the gross root level (Chinese CPC model of good governance), social entrepreneurship (models of Uzbekistan, South Korea, Vietnam, Brazil, Cuba, etc.), holistic and comprehensive social nets for deprived and middle class, provision of free health facilities (Chinese model of public health and poverty reduction), provision of free food stuff to poor students (Indonesian model) through financial fine tunings and policy readjustments is the need of hour. He suggested initiating people-friendly programmes and projects focused on grassroots social development drawing inspiration from the Chinese CPC model of good governance is the need of the hour. Models of social entrepreneurship from countries like Uzbekistan, South Korea, Vietnam, Brazil, and Cuba should be studied and adapted. "There is also an urgent need to establish holistic and comprehensive social safety nets for the deprived and middle class, ensure free healthcare (as in China's public health and poverty reduction model), and provide free food to poor students, following the Indonesian example. These measures can be made possible through financial fine-tuning and policy readjustment, Khan said. Re-activation of micro financing facilities for social development, participation of the private sector, wealthy clergy, proper utilisation of holy shrines, charities, and a balanced growth model would be the right way, he remarked. Only purposefully exempting real estate, construction and sugar sectors will achieve nothing because common people know that the heavy presence of housing societies, tycoons, infrastructure barons and mafia in legislation have their own vested interests and have nothing to do with the massive slumps nests of the common people in the country, the expert commented. Renowned economist Dr Shahid Hasan Siddiqui, speaking in a television programme, remarked that over the past three years, poverty and unemployment have increased, while the most powerful segments — such as the stock exchange, corporate sector, and banks — earned record-high profits for the first time. He said, "The government always talked about export-led growth, but no significant growth is seen in export figures from 2022 to 2025. In the last two years, our remittances surged by $10 billion — unmatched in the region. Exports didn't rise over three years, while skyrocketing remittances caused major tax losses." The federal budget appears designed to secure continued International Monetary Fund (IMF) tranches and funding from other institutions to keep the limping economy afloat. But if this trajectory continues, we may, God forbid, return to the IMF again after 2027 — part of what some see as a larger geopolitical game and this budget is turning us to this direction, he cautioned.
Express Tribune
19 hours ago
- Express Tribune
Pakistani products shine at China expo
Listen to article With the growing popularity of Pakistani products such as fresh fruits, pink Himalayan salt and handcrafted goods among Chinese consumers, more and more Pakistani companies are using CPEC and the expo platform to reach Chinese buyers. At this year's 9th China-South Asia Expo, Pakistan's pavilion occupied a prominent space. Many Pakistani businesspeople brought freshly made, locally sourced products directly from Pakistan to showcase at the event. According to exhibitors, convenient logistics, efficient sea freight services and streamlined customs clearance have made it easier for them to bring their goods to Chinese customers. Faisal from Karachi brought rosewood furniture, wool scarves, handcrafted copperware and gemstone jewellery for his Chinese buyer. "It's now quite easy to ship goods from Pakistan to China," said Faisal. "From Karachi to any city in China, we can get our shipments delivered within 15 days. Tariffs are low and customs clearance is smooth. Everyone knew we were participating in the expo, so our goods were cleared efficiently at ports like Huangpu in Guangzhou and Tianjin. In fact, the economy is showing signs of improvement this year. I'm hopeful sales will be better than last year." Another trader said: "It's not difficult to ship products to China – we use sea freight. Help is coming from all directions and the organisers along with the local government have made sure everything is well-organised and runs smoothly."
Business Recorder
19 hours ago
- Business Recorder
PIA brings 121 nationals from Iran
KARACHI: Pakistan International Airlines (PIA) successfully completed its second special rescue flight on Friday, bringing 121 Pakistani nationals safely home from Iran via Azerbaijan's capital city Baku. According to PIA spokesman, the special flight PK-7160 landed at Lahore airport at 3:40 PM, carrying passengers who had been stranded in Iran due to recent airspace restrictions that affected normal flight operations. Due to the closure of Iranian airspace, the stranded Pakistani citizens were required to travel overland to Baku, Azerbaijan, where they boarded the PIA rescue flight for their journey home to Pakistan. The complex evacuation operation was made possible through the coordinated efforts of Pakistani diplomatic missions in both Iran and Azerbaijan, who played crucial roles in facilitating the safe passage of citizens to the departure point in Baku. The special flight was dispatched on direct instructions from the Government of Pakistan, demonstrating the state's commitment to ensuring the welfare of its citizens abroad during challenging circumstances, he said. Copyright Business Recorder, 2025
