In a development that is likely to raise concerns in India, Chinese state-owned hydropower developer China Three Gorges Corporation (CTGC) last week won the right to develop a major hydropower project in Pakistan-occupied Kashmir as part of the China-Pakistan Economic Corridor (CPEC).
The Kohala Hydropower Project, CTGC’s biggest-yet investment in the Pakistani hydropower market, is expected to have an installed capacity of 1.1 million kilowatts, Chinese state news agency Xinhua reported on 7 January.
The run-of-river scheme will be built on the Jhelum River for an estimated cost of $2.4bn, reports HydroWorld.
Prime minster (Modi) during his visit took up the issue very firmly and spoke very strongly that the CPEC going through PoK (Pakistan-occupied Kashmir) is unacceptable– Sushma Swaraj, Indian External Affairs Minister
The project is part of CPEC, a 3,000-km network of roads, railways and energy infrastructure intended to spur development in Pakistan and boost growth for China’s western region.
According to HydroWorld, In 2014, Pakistan’s National Transmission and Dispatch Co. and China International Water and Electric Corp. (CWE) – a CTGC subsidiary – agreed a 30-year tariff at 7.9 cents per unit for electricity produced by the Kohala scheme.
CWE is required to construct the project on a build, own, operate and transfer basis.
Last year India’s prime minister Narendra Modi was reported to have objected "very strongly" to the CPEC running through Pakistan-occupied Kashmir during a visit to China.
"Prime minster during his visit took up the issue very firmly and spoke very strongly that the CPEC going through PoK (Pakistan-occupied Kashmir) is unacceptable," External Affairs Minister Sushma Swaraj said, Indian media reported in May 2015.
Photograph: Scenic view of the Jhelum River, Pakistan, on which the major new Kohala hydropower plant is to be built (Myasinilyas/Wikimedia Commons)