Govt to Offer 30% Equity in Ghazi Barotha Project To Fund Diamer-Bhasha Dam

The government of Pakistan has devised a unique strategy to raise $700-800 million for financing the Diamer-Bhasha Dam by offering 30 percent equity of the Ghazi Barotha Hydropower Project (GBHPP). The Chief of Army Staff has been briefed on this plan, who has asked the Special Investment Facilitation Council (SIFC) to take up this plan for consultations among various stakeholder entities, reported a National Daily. Official sources revealed that the equity would be divested on a profit-sharing basis to potential investors from friendly nations for a period of 10 years. The Caretaker Federal Minister for Water Resources presented the plan to the Chief of Army Staff, who, in turn, appreciated the proposal and directed the SIFC to initiate consultations with the Power Division, Finance Division, and NEPRA. The Ghazi Barotha Hydropower Project, with a capacity of 1,450 MW, plays a crucial role in the energy landscape, producing an average of 800 MW throughout the year. The government intends to sell 30 percent of the hydro generation directly to the export industry under the CTBCM model, reducing export industry tariffs and boosting the country’s exports. Currently priced at Rs. 1.25 per unit, the Water Resources Ministry aims to persuade NEPRA to increase the tariff to Rs. 10 per unit as a base for the 30 percent generation of the project. This move could attract potential investors from friendly countries like Qatar, Kuwait, UAE, and Saudi Arabia, generating $700-800 million. The proposed plan involves a competitive bidding process among export sector players seeking tariff rates above Rs. 10 per unit, creating a mutually beneficial scenario for the export industry, Ghazi Barotha Hydropower Project management, and foreign investors. However, challenges arise from the Power Division’s reluctance, citing certain concerns and NTDC seeking high wheeling charges, potentially complicating the CTBCM model.