The government, sponsors and lenders have signed a direct implementation agreement for providing financing of $320 million for the 102-megawatt Gulpur hydroelectric power project, which will be developed in Kotli district of Azad Jammu and Kashmir.
The accord was inked in Islamabad earlier yesterday by Private Power and Infrastructure Board Managing Director Shah Jahan Mirza, the chief executive of Mira Power Limited – the project sponsors – and the attorney representing the lenders including the Asian Development Bank, International Finance Corporation and Korean Export-Import Bank.
Agreements for the security package including the Government of Pakistan’s implementation agreement, Azad Jammu and Kashmir implementation accord and water use deal have already been signed. A power purchase deal has also been initialled.
Gulpur is a run-of-the-river power project located on Poonch river. South Korean investors will inject equity up to 25% of the project cost and remaining 75% of the financing will be provided by banks.
The equity investors comprises of renowned Korean companies such as Korea South East Power Company, Lotte and Daelim.
Construction work on the Gulpur project will start soon after achievement of financial close, which is expected in the next few weeks. It will be completed in four years and then Korean investors will run the power complex for 30 years.
It will produce about 475 million units of clean, reliable and affordable electricity for the national grid. After the end of 30 years, the project will be handed over to the government at a notional price of Rs1.
