LAHORE: The Water and Power Development Authority (Wapda) will contribute Rs271 billion as equity for three mega hydropower projects, it has emerged. This followed after the authority completed three previous much-delayed hydro power projects under a fast-track policy and *generated nearly Rs80bn in revenue.
“For the last few years, we introduced a multi-pronged strategy to arrange funds for the completion of various important projects. So far, we have implemented this strategy well on Neelum-Jhelum, Tarbela 4th extension and Golen Gol hydropower projects. These projects helped us earn Rs80bn, increasing our own financial resources and contribution (equity) for three mega projects — Diamer-Bhasha, Dasu and Mohmand dams,” said Wapda Chairman retired Lt Gen Muzammil Hussain.
“When any work is finished in time, it saves money, energy and time. But if it is delayed, several issues come up, including cost escalation,” he told Dawn.
According to a recent report, from Wapda’s Rs271bn equity, Rs176bn will go to Diamer-Bhasha dam (DBD), Rs66bn to Dasu project and Rs29bn will go to Mohmand hydropower project. The authority will recover its equity through tariff which hinges on timely payments by the Central Power Purchase Agency-General within a period of nine years for DBD, five years for Dasu and six years for Mohmand.
Under the financial plan devised for these projects, Rs1300bn has been estimated for the overall DBD which includes Rs234bn provided by the federal government under the Public Sec*tor Development Programme (PSDP), Rs176bn through Wapda’s equity, Rs100bn through local commercial financing and Rs475bn from foreign commercial financing.
Similarly, Rs443bn has been allocated in total for Dasu hydropower project of which Rs66bn will come from Wapda’s equity, Rs80bn from IDA-1/2 credit, Rs37bn from Credit Suisse loan, Rs31bn from export credit agencies, Rs45bn from World Bank, Rs144bn from local financing or Sukuk Bond and Rs3bn from local financing or loan.
For the Rs309bn estimated overall for the Mohmand dam project, Rs114bn will come from PSDP, Rs29bn from Wapda’s equity, Rs33bn from local commercial financing and Rs83bn from foreign currency financing.
For the 4,500MW DBD project with live storage of 6.4 million-acre feet, the bid evaluation process for main civil works of DBD (dam part) is currently under way.
For the 2,160MW Dasu project (stage-1) — a run-of-the-river project with a total installed capacity of 4,320MW — civil work is under way.
And work on the 800MW Mohmand hydropower project — a multipurpose dam with live storage of 0.67 million-acre feet — has also been initiated.
“Wapda is embarking on a disciplined, targeted approach to improve working capital and is taking tactical steps to improve liquidity by accessing the capital markets early enough to obtain favourable terms. Given the need to raise approximately $2.5bn over the next three to four years, we intend to explore the option of a Green Eurobond of benchmark $500 million size for which the authority has concluded two rounds of NDR in the Far East, Dubai and London. A total of 57 institutions were accessed, including leading international institutional investors, private banks and hedge funds,” reads the report.
“Wapda being the largest and bona fide supplier of hydel power has embarked upon a grand plan to develop mega hydropower projects and plans to fast-track them. It will help us to enhance the share of hydropower in the overall generation mix to keep the consumer-end *tariff within affordable *limits, besides creating a buffer for water security of the country,” said the Wapda chairman.
Published in Dawn, February 3rd, 2020
