To raise $350m for the construction of Dasu Hydroelectric power project, Wapda will be tapping the international markets for the very first time. At present, Wapda is involved in negotiations with different financiers to secure critical funds, said a senior official of the Ministry of Water and Power.
To make headway into the global capital market and reassure potential investors, Wapda also needs guarantees from the government of Pakistan, which will help in raising $350 million. The ministry official also divulged that the World Bank is going to be providing a partial credit guarantee of $210 million and the Pakistan government would offer a counter-guarantee to the bank.
Wapda has already succeeded in securing a financing of Rs144b for the Dasu project by signing an agreement with a consortium of major local banks, led by Habib Bank Limited. This loan agreement is the biggest ever signed by any public sector enterprise in Pakistan’s history.
The Dasu hydroelectric power project is going to be constructed in two stages – each of them will bring power production capacity of 2,160MW – on the Indus River in Kohistan district of Khyber-Pakhtunkhwa.
The stage-I is expected five years to complete at an estimated cost of $4.2b. The World Bank is providing a credit line of $1b while rest of the funds are being arranged by Wapda through its own resources and with the help of sovereign guarantees of the government of Pakistan.
Besides the Dasu project, Wapda has also undertaken work on the Kachhi Canal scheme and its first phase will be finished between August and December this year. The canal will irrigate 72,000 acres of land in the backward areas of Balochistan.
Wapda is also expected to complete work for 969MW Neelum-Jhelum hydroelectric power project, 1,410MW Tarbela fourth extension power project and 106MW Golen Gol hydroelectric power project in phases from the end of 2017 to mid-2018.
This low-cost hydel electricity that will be generated by these projects will not only help bring down energy shortages in the country, but will also contribute significantly to the development of economic and social sectors.
Wapda has penned two contracts for the Dasu project namely Main Works (MW)-01 worth Rs115b and MW-02 costing Rs64.4b with China Gezhouba Group Company for main civil works.
MW-01, which will finish in about five years, comprises the construction of the main dam, secondary structures and hydraulic steel structures whereas MW-02 comprises construction of an underground power complex, tunnels and hydraulic structures.
