Islamabad: The Chinese company behind the $2.5 billion Kohala Hydropower Project, M/s Kohala Hydropower Company Limited (KHCL), has formally requested the Pakistani government to extend the validity of the Letter of Support (LoS) for the project until September 30, 2027.
The project, which has a capacity of 1,124 MW and is located on the Indus River, is a key component of the China-Pakistan Economic Corridor (CPEC) framework.
The initial LoS for the Kohala Hydropower Project was issued on December 31, 2015, by the Private Power and Infrastructure Board (PPIB), which played a crucial role in facilitating the project’s execution.
Following this, the LoS’s validity was extended until September 30, 2027, during the 144th meeting of the PPIB Board.
In its request, the company emphasized that it has met all the necessary conditions for the extension, including the submission of the required Performance/Bank Guarantee of $5.62 million.
The company also reiterated that the project aligns fully with Pakistan’s energy policies, contractual agreements, and regulatory framework, and it holds the requisite approvals from both Pakistan and China to proceed.
According to the letter, the project is deemed a “committed project” under the Indicative Generation Capacity Expansion Plan (IGCEP) 2022-2031, which has been approved by the National Electric Power Regulatory Authority (NEPRA).
The Kohala Hydropower Project is regarded as essential for meeting Pakistan’s growing energy needs, especially since it is considered part of the country’s strategic infrastructure development under CPEC.
The Chinese company has also acquired approximately 4,607 Kanals of land for the project, including land needed for construction, operations, and maintenance under a Build-Own-Operate-Transfer (BOOT) basis.
Additionally, compensation has been provided to the affected local populations in accordance with Pakistan’s laws.
The CEO of Kohala Hydropower Company, Liu Yonggang, emphasized that the project has adhered to all required legal frameworks, contractual terms, and regulatory approvals.
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He urged the Power Division to facilitate the prompt issuance of the formal notification for the extension of the LoS, highlighting that such action is vital to ensure the smooth continuation of this important energy project, which is backed by a significant investment from China Three Gorges.
The PPIB, in a communication dated October 4, 2024, informed the company that the extension request was approved, contingent upon the extension of the bank guarantee until December 31, 2027.
The PPIB also requested a detailed project timeline and major milestone bar charts to ensure all activities are completed on time, leading to the Financial Closing (FC) by the extended deadline of September 30, 2027.
The Kohala Hydropower Project is considered one of the most significant energy initiatives in Pakistan, both for its capacity and its strategic importance in enhancing regional power infrastructure under CPEC.
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The extension of the LoS will ensure the uninterrupted development and progress of the project, with a projected completion date aligned with Pakistan’s energy sector goals.
