The International Finance Corporation (IFC) has announced an investment of $100m in Pakistan’s 720MW Karot run-of-river hydropower project on the Jhelum River.
The funding marks IFC’s first project finance engagement with China Three Gorges (CTGC), which is the developer of the $1.7bn project.
IFC’s investment in Karot is its largest hydropower project till date. It also represents its first major collaboration with China Export Import Bank, China Development Bank, and Silk Road Fund.
The Karot plant is expected to generate about 2970GWh of net energy annually, providing affordable and clean power to 3 million people. It is expected to be operational in five years.
The power project is expected to address the severe power shortage in the country and help in boosting its growth.
IFC Infrastructure and Natural Resources global director Bernard Sheahan said “Improving access to electricity in Pakistan is a priority for IFC and the World Bank Group, and we are pleased to see the Karot project advance.
“Our priority has been to support the sponsor and the company in the project’s development by strengthening their environmental, social, and corporate governance capabilities, to ensure power is delivered sustainably.”
The project is expected to make a significant contribution to World Bank Transformational Energy Initiative and Joint Implementation Plan in Pakistan. The program aims to raise $10bn investment to address Pakistan’s acute power shortage and improve sector sustainability.
In 2015, IFC acquired a 15% stake in China Three Gorges South Asia Investment, CTGC’s renewable energy company in Pakistan. The investment was aimed at supporting the company to develop a series of renewable energy projects across the country to provide electricity to more than 11 million people.
Image: Benmore Power Station Lake Aviemore. Photo: Courtesy of Phil_Bird/ FreeDigitalPhotos.net.