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Pakistan’s 720 MW Karot hydropower plant starts commercial operation

Pakistan’s 720 MW Karot hydropower project has started commercial operation. Built by China Three Gorges Corporation (CTG) under a build-own-operate transfer (BOOT) contract with a concession period of 35 years, Karot is the first hydropower project established under the China Pakistan Economic Corridor (CPEC) initiative. Located on the Jhelum River in the Punjab province (northeastern Pakistan), the plant is expected to generate 3.2 TWh/year of electricity.

The plant is owned and operated by a special purpose vehicle, Karot Power, majority-owned by CTG. The independent power producer (IPP) will sell all its energy all of its energy to the Pakistani state-owned power transmission company National Transmission and Despatch Company under a 30-year power purchase agreement. The US$2bn project was funded with 20% equity and 80% debt provided by a consortium of Chinese state-owned lenders, including China Development Bank (CDB) and Exim Bank of China, and the World Bank's private-sector lending arm IFC, which approved a US$100m loan in 2016.

The Karot project is the fourth of five hydropower plants planned for the Jhelum River, alongside the Azad Pattan plant (700 MW), the Mangla Dam (1.1 GW), the Neelum-Jehlum plant (969 MW) and the upcoming Kohala plant (1.1 GW, still under construction). In 2021, hydro represented 25% of Pakistan’s installed capacity with nearly 10 GW, and 20% of the country’s power generation with over 27 TWh. Pakistan targets 60% of renewables in its installed capacity by 2030 (half of which will be hydro).

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