Energy Central-News Article

The Executive Committee of the National Economic Council (ECNEC) has granted approval for an important project of a regional grid in Gilgit Baltistan (GB) at a revised cost of Rs 17.4 billion. The project, which has faced significant delays over the past several years, aims to connect the region to the national grid. GB holds immense potential for generating over 50,000 MW of cheaper electricity, and the regional grid will facilitate the transmission of surplus power to the rest of the country.

Without the regional grid, foreign investors were reluctant to fund power projects in GB since they couldn't sell excess electricity to other parts of the country. The approval of the regional grid project by ECNEC is expected to attract investment in the region's power sector.

The project, proposed by the Ministry of Kashmir Affairs and GB, entails the establishment of regional grids in Phase-I in Astore, Gilgit, Hunza, and Skardu Districts in GB. The revised cost of the project is Rs. 17.425 billion, with a foreign exchange component of Rs. 18.24 million. However, the Planning Ministry will reconsider the bidding, construction, and engineering estimates.

In addition to the grid project, ECNEC has also approved the long-awaited Shagarthang Hydro Power project, which has been delayed for over 14 years. The project, now approved at a revised cost of Rs. 18.3 billion, aims to provide 26 MW of electricity to Skardu city and its adjoining areas. Despite having significant hydroelectric potential, these areas currently experience over 22 hours of load shedding.

The Shagharthang Hydropower Project, located in District Skardu, will be executed by the W and P Department of Gilgit-Baltistan. The revised cost of the project is Rs. 18.374 billion, including a foreign exchange component of Rs. 4461.03 million. The project, initially estimated at Rs. 3.356 billion in 2009, has experienced a staggering 447 percent cost escalation, now amounting to Rs. 18.616 billion.

Initially, the Asian Development Bank (ADB) had agreed to finance the Shagharthang Hydropower Project and the Thak Chilas Hydropower Project in GB under the Renewable Energy Development Sector Investment Programme. However, due to bureaucratic hurdles and opposition from India, the loan agreement for the projects could not be materialized.

Despite the appointment of a project director and staff, who were being paid without progress, the project faced continuous delays. The project has been a consistent demand of the area in every election, as it aims to meet the electricity demand of Skardu and the surrounding areas.

The Ministry of Kashmir Affairs and Gilgit Baltistan had previously informed the Ministry of Planning that the required funding for the project could not be arranged by the Economic Affairs Division and Water and Power Development Authority (WAPDA). Therefore, the project needed to be funded through the Public Sector Development Program (PSDP) to address the urgent need for additional power supply in Skardu.

The objective of the project is to construct a run-of-the-river hydropower project at Shagnarthang, generating 26 MW of electricity for consumers in the Skardu valley, from Basho to Sermik village on the banks of the Indus River.

During the meeting, ECNEC also approved the Establishment of the 48 MW Shounter Hydropower Project in the Neelam Valley District, AJK, at an updated cost of Rs. 14.985 billion. The project will be financed 85% by the Saudi Fund for Development (SFD) and 15% through AJK ADP.

Furthermore, the ECNEC considered and approved the Khyber Pakhtunkhwa Rural Accessibility Project (KP-RAP) in multiple districts of the Khyber Pakhtunkhwa Province. The project, with a cost of Rs. 69.400 billion, aims to upgrade the rural road network of 768.4 km, enhancing accessibility to markets, education, and healthcare facilities. The World Bank will provide foreign aid/loan of Rs. 67.200 billion, and the local component will be funded by the Government of KP, responsible for the loan repayment.

The ECNEC meeting was chaired by Federal Minister for Finance and Revenue, Senator Mohammad Ishaq Dar, and attended by Federal Minister for Planning, Development, and Special Initiatives, Mr. Ahsan Iqbal, as well as other federal secretaries and senior officers from federal ministries and provincial departments.