The ADB loan is being provided to Star Hydro Power Limited, which is jointly owned by Korea Water Resources Corporation (K-water), along with Daewoo Engineering and Construction Company and Sambu Construction Companym to build the 147MW run-of-river Patrind project near Muzaffarabad.
The project marks the first investment in Pakistan’s power sector by a consortium of companies from the Republic of Korea. The independent power producer (IPP) – which will revert to government ownership after 30 years – is expected to create 2700 local jobs and generate over $240M from purchases of local goods and services.
ADB has played a leading role in the development of the power sector in Pakistan, and the financing arrangements for the new plant draw on the experiences of the New Bong Escape Hydropower Project – Pakistan’s first private hydro IPP facility, which was partly financed by ADB.
The new Patrind project is expected to be up and running in 2016. Pakistan currently has an acute shortage of power, estimated at over 4200MW during peak demand, which has led to worsening brownouts and blackouts across the country, necessitating power rationing.
Most of Pakistan’s energy is generated from imported oil, putting a severe strain on the country’s finances as global oil prices rise and the local currency depreciates.
