Pakistan's first CDM project kindles hopes for hydropower

by Roshan Din Shad | Thomson Reuters Foundation
Wednesday, 15 May 2013 11:00 GMT

As Pakistan-controlled Kashmir struggles to meet rising energy demand, hydropower may prove the answer – though disputes remain with India about control of the region’s rivers

BONG, Pakistan (Thomson Reuters Foundation) – Pakistan has completed its first project under the United Nations Clean Development Mechanism (CDM) with a hydropower scheme that the government hopes will help tackle the country’s electricity deficit while acting as a trailblazer to attract foreign investment.

The 84-megawatt New Bong Escape project has been built in Mirpur district in Pakistan-administered Kashmir (known as Azad Jammu Kashmir or AJK), 100 km (63 miles) south of Pakistan’s capital, Islamabad.

The project uses “run of river” construction, with a semi-submerged powerhouse containing four sets of turbines and generators rather than a dam. It is located about 8 km (5 miles) downstream from the Mangla Dam, a major reservoir and itself a 1,000 MW hydropower generator, which was commissioned in 1967.

The new plant, co-funded by the Asian Development Bank and the Islamic Development Bank, was the country’s first hydropower scheme to be registered with the UN Framework Convention on Climate Change (UNFCCC) as a CDM project, in January 2009. The $217 million project was completed and began power generation in March.

According to Larib Energy Limited, the project developer, it will reduce Pakistan’s carbon dioxide emissions by 219,000 tonnes annually by supplanting fossil fuel-fired power plants.


But people who live near the plant complain that they have seen no economic benefit from its construction, and that the local environment is now in worse shape than previously.

“Locals were denied jobs during the construction and ... threatened by company officials for demanding jobs,” charged Tahir Choudhary, 42, a farmer who lives in Lahri Choudharian, a village close to the scheme.

Residents say that a river downstream from the Mangla reservoir used to flow past the corner of their village and carry away sewage, but it was diverted for the power project, leaving the riverbed dry.

“We have had to dig 20-30 feet (6-9 metres) to get water, but after diversion (of the river) our wells are dry owing to the fall in the water level,” said Zahoor Ahmed, who also lives in the village. Ahmed believes drilling for the construction of the hydropower plant led to the fall in the water table.

“We have no benefit from this project because we were provided with neither employment nor electricity from it,” said Raja Naeem, 50, who runs a small hotel near the plant.

Under an agreement between Larib Energy and the Water and Power Development Authority of Pakistan (WAPDA), the electricity generated through the project is being supplied to the national grid.

“All the labourers were brought from neighbouring Punjab province of Pakistan for the building of the project, and locals were kept deprived of jobs,” said Muhammad Zubair, 25, who sells beverages on a narrow bridge in Bong which connects the project site with the rest of Mirpur.

Project officials say workers were brought from elsewhere because local people did not have the needed skills.

“We had to employ technical staff for the project who were not available locally, and we brought them from other areas,” Larib Energy chairman Haji Aziz said. He said the project had produced other benefits for local people, however.

According to Aziz, diverting the river will protect Lahri Choudharian village from flooding. And by deepening the river channel, the project has made 4,500 acres (1,800 hectares) of previously flood-prone, uncultivated land near the village viable for agriculture.


No one denies the need for greater electric capacity. Last month Muzaffarabad, the capital of Pakistan-administered Kashmir, witnessed violent protests against prolonged power cuts, with 45 police officers injured.

There were also protests last summer when the mercury touched 52 Centigrade (126 Fahrenheit) in some areas of Punjab, Sindh and Balochistan provinces, threatening lives and making life miserable for people in the face of power outages.

Pakistan’s federal power ministry says that demand for electricity in May last year was about 6,000 MW greater than the available supply of 10,800 MW, and a shortfall of over 6,000 MW has also been predicted for the peak summer months of May to August this year.

According to the Water and Power Development Authority of Pakistan, two-thirds of the country’s electricity is produced from fossil fuels, and one-third from hydro. There are plans for eight hydroelectric projects totalling 3,600 MW on rivers in Kashmir. These are due to be completed by 2020, but first financing must be arranged.

“Pakistan’s economic condition is very poor due to the prevailing (security) situation, and it is very hard to bring in foreign investment,“ said Waqar Ahmed, chief executive officer of Star Hydro, a Korean company building a 150 MW hydro project in the country. He said that the great potential of hydropower often was not enough to outweigh investors’ concerns.

Fareed Ahmed, deputy director of planning at the territory’s hydroelectric board, said that more than 8,100 MW of potential hydropower had been identified and about 1,000 MW exploited so far, with 10 schemes underway to increase capacity by a further 1,200 MW  over the next four years.  

Choudhary Abdul Majeed, Pakistan-administered Kashmir’s prime minister, said that given dwindling reserves of fossil fuels, “the only alternate source of electricity production for industry and domestic use left in this region of ours is hydroelectric, in which AJK is the richest zone.”


But Pakistan is at loggerheads with India over Kashmir’s waters and recently went to the International Court of Arbitration to apply for primary rights to water from the Neelum River, which flows into AJK from Indian-controlled Kashmir.  

Pakistan is building one of its largest-ever energy projects (969 MW), to be finished by 2016, on the Neelum, and India is building a 350 MW project on the river as well.

Despite the appetite for large-scale schemes, some feel that thinking small can be of greater benefit to people who live near hydro schemes.

“Small hydropower projects are very beneficial for rural areas as they provide job opportunities, generate economic activities and above all provide electricity to nearby villages day and night,” said Faisal Shall, 35 who lives near a small hydropower plant in Chinari village, where he also teaches economics.

About a dozen such plants are in operation in AJK on streams in the Neelum, Leepa and Jhelum valleys. The 3.2 MW Kathai hydropower project, built in 1995, provides electricity to some 60 villages with a total population of 150,000 in Hattain Bala district.  

Roshan Din Shad is a freelance journalist based in Muzaffarabad, the capital of Pakistani-administered Kashmir.

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