ADB balks at Pakistan’s 4,500-MW Diamer Bhasha hydroelectric plant, distributes funding elsewhere

The future of Pakistan’s 4,500-MW Diamer Bhasha hydropower project is on tenuous ground following an announcement by the Asian Development Bank earlier this week, saying it would not commit funds for the plant’s development.

Speaking at a news conference following a Central Asia Regional Economic Cooperation (CAREC) ministers’ meeting, ADB president Takehiko Nakao said the project requires other investors before the bank could make a decision.

“We haven’t decided yet because [Diamer Bhasha] needs big money,” Nakao said. “This is a very big project.”

The president left the door open for funding of the US$14 billion project, however, noting that the proposal is still of significance by increasing access to power and improving conditions for irrigation.

HydroWorld.com reported last June that the U.S. Agency for International Development (USAID) had awarded a $5.9 million contract to perform a technical engineering review of project plans after previously pledging $200 million for its development in October 2014.

Other financial commitments of note have been hard to come by, however, with the World Bank even repeatedly refusing to sign on as a co-lender after Pakistan declined to seek a no objection certificate from neighbor India.

As planned, Diamer Bhasha would include a 272-meter-tall roller-compacted-concrete dam, two diversion tunnels, two underground powerhouses of 2,250 MW each, a permanent access bridge, and hydro-mechanical and steel structural equipment. The plant would be located on the Indus River in the northern Gilgit-Baltistan region.

Though ADB is still lukewarm on Diamer Bhasha, it is remaining active in Pakistan’s hydro market, announcing that it will provide $100 milllion for plant development in the southwestern Balochistan province. Details about what projects might be included under the financing have not been made known, though local sources report their total cost will be about $115 million.

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Michael Harris formerly was Editor for HydroWorld.com.

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