AJK government signs agreement with Chinese firm to build 700MW Azad Pattan hydropower project

The Government of Azad Jammu & Kashmir and Azad Pattan Power Private Limited have signed agreements to bring the Azad Pattan power project closer to financial close. The 700MW hydropower project is part of the China Pakistan Economic Corridor and, once completed, it will help the region generate clean energy without relying on expensive fuel powered plants.

“The project agreements namely ‘GoAJ&K Implementation Agreement’ and ‘GoAJ&K Water Use Agreement’ were signed by Azad Jammu Kashmir Power Secretary Zafar Mahmood Khan and Azad Pattan Power Private Limited CEO Li Xiaotao,” read a statement issued by the Ministry of Energy. “With an investment of over $1.35 billion, the Azad Pattan project won’t be relying on imported fuel, enabling the country to move towards cheaper and greener power generation.”

These two agreements are just the latest in a series of agreements signed between the governments of Pakistan and China regarding power generation and power use along CPEC. In July, similar agreements including the Government of Pakistan Implementation Agreement, the Government of Punjab Water Use Agreement, and the Tripartite Power Purchase Agreement were signed in July in the presence of Prime Minister Imran Khan.

The Azad Pattan project is part of the Policy for Power Generation Projects 2002 and will be implemented by the Private Power and Infrastructure Board (PPIB) on a build, own, operate and transfer (BOOT) basis for a period of 30 years. After this time, the project will be handed over to the Government of Azad Jammu & Kashmir free of cost.

The project is being financed by a consortium of lenders which includes China Development Bank, China Construction Bank, Industrial & Commercial Bank of China and Bank of China, and is expected to contribute around 3,266 GWh per year to the national grid by 2027.