The hydropower potential of the Jhelum River was identified by various studies carried out by international agencies. Already the German Agency for Technical Cooperation (GTZ) proposed the Karot Hydropower Project in 1994. The Karot Hydropower Station in Pakistan is the first investment project of the Silk Road Fund and is part of the China-Pakistan Economic Corridor. It is a run-of-river concrete-core rock fill gravity dam with an installed capacity of 720 MW. Its is one of five hydropower stations planned to be built on the Jhelum River. The dam is expected to be 95.5m-high and 460m across the Jhelum River.
Project Information
Project name
Karot Hydropower Project
Type
Energy 
Location
Punjab/Pakistan, 55 km east of Islamabad 
BRI Corridor
China-Pakistan Economic Corridor (CPEC)
Current Status
Under construction. On September 28, 2016, the federal and Azad Jammu and Kashmir governments signed an implementation agreement with a Chinese consortium for development and operation on river Jhelum.
Start of Construction
2016
Expected completion Date
December 2021
Chinese Involvement
Financing, Operation
Projected Total Project Costs
USD 2 billion
Capacity
Reservoir storage capacity of 164.5 million cubic metres. Its installed capacity is 720MW with an average annual electricity output of 3436 GWh which will provide power for approximately seven million households.
Operator
The Karot Power Company will operate the Karot Hydropower plant. The Three Gorges South Asia Investment (CSAIL), which is a subsidiary of the state-owned China Three Gorges Corporation (CTGC) holds the majority share of 93 percent. The Associated Technologies of Pakistan also holds shares. After completion of the construction, the Karot Power Company will run and maintain the project for 30 years at a levelised tariff of 7.57 cents per unit after which it will be transferred to the Punjab government at a notional price of Rs. 1. After 30 years the ownership is supposed to be turned over to the government of Pakistan.
Financing
The Karot Hydropower project will be financed with 20 percent equity and 80 percent debt. The project will be funded through multilateral and bilateral institutions. Multilateral support receives the project through the International Finance Corporation in form of a loan over USD 100 million. Bilateral support recieves the project through China’s Silk Road Fund. Furthermore, the Export-Import Bank of China and China Development Bank will issue loans to the Karot Power Company. The Karot Hydropower project is the first project that will be funded by China’s Silk Road Fund. The Export-Import Bank of China leads the consortium of financiers for the project.
Constructors
Yangtze Three Gorges Technology and Economy Development Co. (TGDC) and China Machinery Engineering Corporation (CMEC) consortium was awarded a USD 1.27 billion engineering, procurement and construction contract for the project in 2015. Yangtze Three Gorges Technology and Economy Development Co. (TGDC) will be responsible for the engineering and construction, while China Machinery Engineering Corporation (CMEC) will be responsible for the procurement.
Employment
The project is expected to create 3,500 jobs. Currently there are around 2,000 workers at the site of which around 750 are Chinese.
Additional Project Information
The plant will be interconnected to the national grid by means of a 5km-long, 500kV transmission line. It will operate for six months a year. The Karot project is in the Pakistan-administrated part of Kashmir, which India and Pakistan both claim.
Further Information
CPEC – China Pakistan Economic Corridor
World Bank