A tripartite agreement was signed between a Chinese company and the governments of Pakistan and China on Thursday for construction of a 1,124-megawatt hydropower project at Kohala on the Jhelum river at a cost of USD 2.4 billion.
Prime Minister Imran Khan, who witnessed the signing ceremony at his office, termed the agreement "the country's biggest-ever foreign investment". Pakistan-occupied Kashmir's prime minister was also present on the occasion, Dawn reported.
The accord represents the largest power sector investment by an independent power producer (IPP) under Beijing's multi-billion dollars' worth China-Pakistan Economic Corridor (CPEC), including the Gwadar Master Plan.
Speaking on the occasion, the prime minister said the government had resolved to focus on a "green and clean power generation" through hydroelectricity in order to reduce dependence on imported fuel.
Khan said the government welcomed the investment as it could set a precedent for the country to move towards sources of clean energy.
The event was witnessed, among others, by federal cabinet members, Chinese Ambassador Yao Jing, CPEC Authority Chairman retired Lt Gen Asim Saleem Bajwa and representatives of China's Three Gorges company.
The project, a part of CPEC, has been awarded to Kohala Hydropower Company (KHCL), which is a subsidiary of China's Three Gorges Corporation (CTGC).
The prime minister said Pakistan should have invested in the hydropower sector decades ago. "The country was making good progress when it was producing hydropower, but then it started banking on imported fuel. This made not only the local industry non-competitive, but also put an additional burden on foreign reserves."
Electricity generation through imported fuel, he said, had adversely affected the environment as Pakistan was placed by experts on a list of nine states most likely to be badly affected by climate change.
The CPEC is a flagship infrastructure-related project conceived by Chinese President Xi Jinping as part of Beijing's expanded multi-billion dollar Belt and Road Initiative (BRI) that aims to create more efficient commercial links between the continents of Asia, Africa, and Europe.
Bajwa is also the chairman of the CPEC authority.
Since last year, the work on the CPEC-funded Kohala Hydropower Project has been in jeopardy as the Chinese contractor was demobilised following a controversy over downstream environmental flows.
The 1,124MW (megawatt) Kohala Hydropower Project, is being built on the Jhelum River in PoK under CPEC. It has been awarded to the Kohala Hydropower Company Ltd (KHCL), a subsidiary of China Three Gorges Corporation (CTGC).
The signing of the Hydel project comes at a time when India and China have been involved in high-level military talks to disengage following the Galwan Valley incident in the Ladakh region, where 20 Indian soldiers were killed on June 15 in a violent clash with the Chinese Army.
( With inputs from ANI )