TPPA of USD 2.4 Billion Signed by Pakistan with China for Hydro Power Project in Pakistan Occupied Kashmir 

On 25th June 2020, a Tripartite Power Purchase Agreement (TPPA) was signed for the construction of the 1124 MW Kohala Hydro Power Project. The agreement was signed in between the Government of Pakistan, Chinese Company- China Three Gorges Corporation (State-owned company of Chinese Government), and Government of Azad Kashmir (Part of Pakistan occupied Kashmir).

Kohala Hydro Power Project

The Hydropower project is located near the villages of Siran and Barsala in Muzaffarabad district of Pakistan Occupied Kashmir. The Hydro Power Project is located on the river Jhelum.

The project is part of the China Pakistan Economic Corridor. The estimated cost of the project is USD 2,364 million and is expected to be completed by 2026.  The Hydro Power Plant will be constructed by Kohala Hydropower Company Limited (KHCL). KHCL is a subsidiary of China Three Gorges Corporation.

China-Pakistan Economic Corridor (CPEC)

CPEC was established on 22nd May 2013 with the intent to developed Pakistan’s infrastructure for strengthening its economy

CPEC has been a Chinese debt trap for Pakistan. This was proven when the Pakistan government was negotiating for a USD 6 billion bailout package for their economy with the International Monetary Fund (IMF) in 2018.

The documents submitted by Pakistan’s Ministry of Planning and Development to the IMF have revealed that in the shape of debt and dividends Pakistan will pay China USD 40 billion for USD 26.5 Billion investment under the CPEC.  The original value of the CPEC project was estimated at USD 46 billion at the initial stages, but the total value of CPEC projects as per the last update on 2017 has reached USD 62 Billion (more than double of the USD 26.5 billion).

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