China Gezhouba Group, Al-Jomaih Holding of Saudi Arabia, and Haseeb Khan Limited of Pakistan, as project sponsors, have reached financial close on the 870MW Suki Kinari Hydro project, which is part of China Pakistan Economic Corridor. This is a run-of-the-river hydro project on the Kunhar River in northern Pakistan.

The supervising agency is the Private Power and Infrastructure Board (PPIB). Construction has started, and should be completed in 2022. The signing ceremony was held on January 9, between the board’s officials and the project sponsors.

The project is a thirty-year Build-Own-Operate-Transfer structure, with a long term power purchase agreement signed with the Government of Pakistan. This is the first private sector hydro project in Pakistan.

The project will have a debt to equity ratio of 3:1. In April 2015, an agreement for the 75% debt portion was signed by the developers and China Exim together with ICBC.

The Al-Jomaih Group is an industrial conglomerate based in Riyadh, Saudi Arabia, and is one of the country's top investment groups. China Gezhouba Group is an engineering and construction group with its headquarters in Beijing. Its projects include ports, airports, rail, dams, and hydroelectricity.

China is heavily involved in hydro projects in Pakistan, providing finance, carrying out construction work, and running operations under Independent Power Producer structures. Last September Asian Infrastructure Investment Bank (AIIB) approved a US$300 million loan for the Tarbela 5 Hydropower Extension. The dam is being gradually developed to add hydro power tunnels. This is the fifth extension using the same dam complex.

According to the Pakistan Ministry of Information, on January 4, a meeting took place in Islamabad between the Auditor General for Pakistan, senior officials of the Ministry of Finance, officials from the Pakistan Water & Power development Authority, and the World Bank.

At the meeting, World Bank country director Patchamuthu Illangovan, confirmed to finance minister Mohammad Ishaq Dar, that the World Bank entity, International Bank for Reconstruction and Development, will lend US$390 million, and AIIB will lend US$300 million. Financial close is expected this month.

At the same meeting, the finance minister was also informed that two works contracts for the Dasu Hydropower Stage I Project, worth a total of US$2 billion, are ready to be signed after a bidding process. The Dasu project is also being supported by the World Bank. This is a run-of-the-river hydro facility on the River Indus, upstream from Tarbela Dam. Total project cost is estimated at US$4 billion.

Chinese companies, such as China Civil Engineering Construction Company, and China Railway First Group, have been involved in the initial work, such as building access roads, project accommodation, and transmission lines.

Chinese bidders have also put in for the two main works contracts, one involving the building of the dam on the river, and the other the turbines and power plant.