ISLAMABAD: The paperwork on the Dasu hydropower project, being built on the Indus to enhance hydropower generation in the country, has begun with considerable progress made in start-up activities, according to a status report on the project.
All key positions in the project management unit have been filled. A contract with consultants responsible for supervising construction has been finalised. Prequalification applications for two major contracts — for construction of the main hydraulic structure and power generation facilities — are due on Oct 31.
The report prepared by the World Bank says bids have been invited for preparatory works, including relocation of a portion of the Karakoram Highway, the laying of transmission line from Duber to support construction activities and construction of offices and housing colonies.
A social programme has been launched in the field and a unit has been established for land acquisition. Surveys regarding land/property ownership have also been completed.
The project will improve local communities’ access to socio-economic services and build Wapda’s capacity to undertake more hydropower projects.
Under the project, a 2,160MW hydropower plant will be established, which could be expanded to 4,320MW at low cost. The project has been termed a “high-risk-high-reward operation aimed at providing low cost non-carbon renewable energy”.
An International Development Association (IDA) credit amounting to $588.4 million and a partial IDA credit guarantee amounting to $460m have been approved by the World Bank for the first stage of the project. The credit agreement between Pakistan and IDA of the World Bank was signed on Aug 25.
The IDA credit is structured in two portions: one for $190.3m and the other for $398.1m. Wapda is expected to contribute about $600m to the project.
The IDA credit funds will primarily be used for project supervision, implementation of social and environmental management plans and preparatory works such as relocation of the highway and construction of access roads, offices and colonies.
Wapda funding will supplement the same expenditures and be used in later years of the project after IDA funds are used. In addition, Wapda funds will be used for counterpart funding for the main works if needed.
Financing for the major works — including the building of main structures, powerhouse and diversion tunnels, and purchase of mechanical and electrical equipment — will be commercially raised on the balance sheet of Wapda with credit enhancement provided by the government and the World Bank.
The first stage of the project will be financed with a number of IDA credits and guarantees in a sequenced manner to support the commercial financing of the project.
Published in Dawn, October 12th, 2014