LAHORE: The 720-megawatt Karot Hydropower Project (HPP) is likely to start operations in June, two months before its actual Commercial Operation Date (COD) in August, Dawn learnt on Saturday.

The civil, mechanical and electrical works of Karot HPP – the first hydel power generation project under the China-Pakistan Economic Corridor (CPEC) – are about to be completed while the project management is set to start internal testing of the four turbines from next month. The water filling of the pond has also begun and is likely to complete by February 15.

“We are expecting the project completion in June, two months before of the actual COD, as 90 per cent work on the project has been completed, paving the way to start internal testing of the four turbines one by one from next month,” Private Power Infrastructure Board (PPIB) Managing Director Shah Jahan Mirza told Dawn. PPIB is the project’s supervising agency.

According to a document, over 87pc work at the dam has been completed while 89pc work on spillways has also been done. Moreover about 99pc work has been completed at the intake tower and 92pc at power house. The work related to the laying of the transmission line for the purpose of evacuating power, transmitting and adding it into the national grid for onward supply to the distribution system has mostly been completed.

The project is being constructed at river Jhelum at the dual boundary of Rawalpindi, Punjab and Kotli, Azad Jammu & Kashmir (AJK). It is being executed by China Three Gorges-CWE Investment Corporation, a leading Chinese firm, which is incorporated and registered in Pakistan as Karot Power Company Limited. The project’s financial close was achieved in March 2017, paving the way to start construction work in the same year.

“It will be the first of the total three CPEC’s hydropower projects, which will start power generation soon by attaining its COD likely before two months of its actual deadline. The other two include the 870MW Sukhi Kenari HPP and 1,124MW Kohala HPP,” the PPIB MD explained.

Mr Mirza said that after testing of the turbines internally by the project executing company, the PPIB team, through its consultants would carry out testing of the machines. “But we are expecting that all required tests would take around three months, making the project ready to commence commercial operation in June,” he added.

According to another official of the PPIB, who wished not to be quoted, the testing of the turbines would start one by one in February. “After completion of testing of turbines one by one, all four would undergo a final test together. If all four units successfully complete a test run together at the full installed capacity of 720MW for a period of 72 hours under the technical specification and requirement, the project would be considered ready for commercial generation,” the official explained.

It may be mentioned that since the Karot HPP is about to be completed, construction works at the Sukhi Kenari HPP is also underway at the moment.

However, construction work at the Kohala HPP is yet to be initiated due to various issues including one related to taxation. The company assigned to execute the Kohala HPP also wrote a letter to the government on this issue recently.

The company warned that withdrawal of exemptions of tax would result in imposition 17pc sales tax on all imports, resulting in not only cash flow impact but will also increase tax and financing cost.

“For Kohala HPP, it is extre­mely difficult to arrange financing as the project is located in AJK. Furthermore, due to rising circular debt and negative outlook of Pakistan, power sector lenders are shy in providing financing for the power project in Pakistan. Therefore, any increase in tax will result in the increase financing, which will be difficult to arrange at this juncture,” the company warned in its letter.

Published in Dawn, January 23rd, 2022