The Khyber Pakhtunkhwa government has signed an agreement with SK Hydro and Industrial & Commercial Bank of China for the construction of the 870 MW Suki Kinari hydropower project in Pakistan.
As part of the deal, the project will be built on Kaghan Valley in Mansehra District of the Khyber Pakhtunkwa Province, with an investment of $1.9bn. Construction work is scheduled to be completed within five years.
Power generated from the project will be sold to the Pakistan government under a 30-year power purchase agreement.
Following completion of 30 years of operations, the project will be handed over to the Khyber Pakhtunkhwa government.
The hydro power will be supplied to Pakistan’s national grid following which it will be distributed to the entire country.
Expected to produce 3050GWh of power annually, the project is expected to substantially increase existing available power generation capacity for the country.
Khyber Pakhtunkhwa Energy and Power Minister Atif Khan was quoted by The Nation as saying: “It would prove helpful in removing electricity shortfall in the country.”
In April 2015, SK Hydro signed an agreement with Export-Import Bank of China and Industrial and Commerce Bank of China (ICBC) for 75% of financing costs of the project.
Khan noted that the He disclosed that the Khyber Pakhtunkhwa government is also considering signing agreements for 69MW Lawi, 84MW Mataltan, 300MW Balakot and Sharmai Hydropower projects in near future.