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LAHORE: The government plans to award two run-of-the-river hydro-power projects to the sponsors under Build, Own, Operate, Transfer (BOOT) mode for a period of 30 years.

After 30 years, the respective provincial government will take over the administrative and functional control of the projects by paying Rs1 token money to the sponsors for each scheme, Dawn has learnt.

The projects being planned to be marketed within next 15 days are 80 to 100 MW Neckerdim-Pauer in Chitral and 132MW Rajhdani on Punch river in the Azad Jammu and Kashmir (AJK). The Neckerdim-Pauer project had earlier been advertised some years ago. But no one expressed interest in it, forcing the government (Private Power Infrastructure Board) to put the process on hold for some time.

Similarly, the Rajdhani hydro-power scheme was envisaged 10 years ago by the AJK government. But the sponsor couldn’t start the work, forcing the government to cancel the project. And later the scheme was handed over to the PPIB from the AJK in order to restart the process to find new sponsors to execute this to be launched in the downstream reaches of the Punch River, in Northern Pakistan (about 12km upstream of the Mangla Reservoir and 3km from Rajdhani village, district Kotli, AJK).

“The PPIB has been directed by its Board of Directors (BoD) to present these projects before the financially sound and experienced sponsors that could complete them fast within a stipulated time,” a senior official of the Ministry of Energy (Power Division) told Dawn on Tuesday.

“After completion, the sponsors would own and operate the project for a period of 30 years. And finally after completion of the 30-year period, they would hand over these schemes to the respective government without any cost by paying just Rs1 (for each project) as a token money,” the official said.

The official said the projects would roughly cost US $250 million and $350 million to $400 million.

Under the procedure and terms and conditions, the sponsor would be liable to share 20 to 30 per cent of the total cost (equity), while rest of the amount would be financed by the banks as loan. In the first 10 years (after completion of the project), the bank loan would be paid back through power selling.

“The whole process to repay the bank loan and sponsors’ equity will complete in 30 years and later the schemes would be handed over to the respective governments,” he said.

Published in Dawn, November 1st, 2017