The International Finance Corporation (IFC) has reached financial close on its US$100 million investment in the 720MW Karot run-of-river hydropower project in Pakistan, being developed by China Three Gorges Corporation (CTGC).

World Bank unit IFC’s support for the US$1.7 billion project on the Jhelum River is its first project with China Three Gorges, one of the world’s largest renewable power companies. In 2015, IFC acquired a 15% stake in China Three Gorges South Asia Investment Limited, CTGC’s renewable energy platform company in Pakistan. The move was undertaken in order to help develop a series of renewable energy projects that are expected to provide electricity to more than 11 million people.

To mark the financial close, representatives of China Three Gorges South Asia Investment, Private Power and Infrastructure Board (PPIB) and Alternative Energy Development Board (AEDB) signed documents at a ceremony on March 10. Minister of water and power Khawaja Asif was also present.

Karot is IFC’s largest hydroelectric power project to date and represents IFC’s first major collaboration with the China Export Import Bank, China Development Bank and the Silk Road Fund.

The Karot project is the fourth among five hydroelectric power projects to be developed along the Jhelum river. It is on the priority list of projects of the China-Pakistan Economic Corridor (CPEC). The project is being developed on a build-own-operate-transfer model, with a 30-year concession period.

Construction began one year ago, and the plant should be operational in five years. Pakistan represents IFC’s second largest engagement in the Middle East and North Africa region, with over US$5.6 billion in cumulative investments committed to date.

The Karot project is a major contribution to the joint World Bank Group Transformational Energy Initiative and Joint Implementation Plan in Pakistan, which aim to mobilize US$10 billion in new energy generation investments to address the country’s acute power shortage and improve sector sustainability.

Photo courtesy of China Three Gorges Corporation.