The largest single deal signed during the Belt and Road Forum in Beijing was the memorandum of understanding (MoU) to develop hydro power installations in the Indus River Cascade, which includes the Diamer-Bhasha Dam project in Gilgit-Baltistan, Pakistan.
China signed up to help fund and develop Pakistan’s five big water reservoirs with an estimated cost of US$50 billion. The projects will be completed in the Indus River Cascade, which has the potential to produce 40,000MW of power.
Under the MoU, China’s National Energy Administration would oversee building and funding of five dams, including Diamer-Bhasha, Pattan, Thacoat, Bunji and Dasu dams. Pakistan has an identified potential of 60,000MW from hydropower projects.
Prime Minister Nawaz Sharif witnessed the signing of the MoU by Water and Power Secretary Yousuf Naseem Khokhar and the Chinese Ambassador in Pakistan, Sun Weidong.
On the sidelines of the Forum, China’s National Energy Administration hosted the Diamer-Bhasha Project Conference, where a series of presentations were given on the Bhasha Dam project. Yousuf Naseem also gave a briefing to the Pakistani and Chinese delegations after the MoU was signed. The Main Dam works contract has yet to be awarded.
The Diamer-Bhasha Dam is expected to cost around US$12 billion and be completed in nine years.
The project is located on the Indus River, about 315km upstream from the Tarbela Dam, 165km downstream from the Northern Area capital Gilgit, and 40km downstream from Chilas.
Local press reports say that the Asian Infrastructure Investment Bank may get involved in funding the projects. China has valuable experience in large dam projects. China Three Gorges owns the Three Gorges Dam, which is the world's largest hydroelectric power plant, with a capacity of 22,500MW.
Meanwhile the State Bank of Pakistan has issued a banking license to Bank of China, which will soon start opening branches in the major cities of Pakistan. The move is seen as part of Bank of China’s strategy to play a major role in financing large infrastructure projects within the China Pakistan Economic Corridor (CPEC).
According to a statement from the State Bank of Pakistan, Bank of China aims to provide specialised banking services to effectively serve the financing needs of CPEC-related projects, leveraging on its experience and global technology platform. Bank of China will open its first branch in Karachi, and gradually expand its network to other cities.
Photo courtesy of China Three Gorges.