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Hydropower potential in KP: Markhor Energy, InfraCo Asia sign accord


2/25/2019
By developing five hydropower projects totalling 100MW in power output, Markhor Energy and InfraCo Asia aim to open up future private sector investment in small to medium hydropower projects in the KP province, and lower electricity prices by reducing reliance on imported fuel. Markhor Energy and InfraCo Asia Development Pte. Ltd. (InfraCo Asia), a company of the Private Infrastructure Development Group (PIDG), announced the signing of a Joint Investment and Development Agreement (JIDA) for the development of portfolio of 5 hydropower projects with a projected combined power potential of approximately 100MW in Khyber Pakhtunkhwa (KP) Province of Pakistan. The projects will be implemented by Equicap Asia, InfraCo Asia's contracted Developer Team for South Asia.
 
This agreement will help fulfil InfraCo Asia's aim of enabling and accelerating investment in small to medium hydropower plants in Pakistan. Growth in hydropower will help diversify the energy mix in Pakistan and will also help reduce the overall electricity tariff in the country.
 
Presently, approximately 60 percent of Pakistan's total energy mix is based on imported fuel (oil and RLNG), which increases the off-take price due to changes in the price of oil in the international market. Developing hydropower projects will reduce the import bill of the country and reduce its carbon emissions. Hemayatullah Khan, Advisor to the Chief Minister of Khyber Pakhtunkhwa on Energy and Power said, "We welcome InfraCo Asia to the KP Province and I am extremely pleased that they have chosen our hydropower sector for their first investment. There are huge opportunities under our policy framework for experienced and credible investors like InfraCo Asia in this sector. Clean, renewable energy is central to Pakistan's future development plans and the provincial government, under the leadership of our Chief Minister, is ready to provide all facilitation to ensure investors' interests are protected."
 
Pakistan has a hydro power potential of 41,700MW out of which 24,000MW is in KP province. There are currently no small to medium hydro power projects in operation in the private sector. While private sector investors have expressed interest in small to medium size projects (less than 100MW) in the KP province, they have not moved forward because the current risk profile is high.
 
InfraCo Asia CEO Allard Nooy said, "InfraCo Asia's investment in the KP hydropower projects is aimed at providing a proof-of-concept for future small to medium hydropower project development throughout Pakistan. It supports InfraCo Asia's aim to serve as a catalyst for private sector investment. By developing the KP projects in a sustainable manner that supports the health of local economies, we hope to chart a path that other firms will follow in the future."
 
Markhor Energy CEO Ali Maskatiya said, "Markhor Energy passionately believes that energy independence is paramount for Pakistan's sustainable future development. Pakistan is blessed with abundant renewable sources of energy, all of which now offer rates of electricity consistently cheaper than their thermal based alternatives. Hydropower is the oldest and most established form of renewable energy and Pakistan has a substantial part of its energy contributed by large scale projects developed early in the country's history.
 
These projects are still functional today and are testament to hydropower's efficacy as a long-term provider of clean and cheap electricity. We are excited to be partnering with InfraCo Asia as the pioneers of a small to medium hydropower platform and we hope to benefit from InfraCo Asia's deep experience and skill in developing portfolios of this nature.
 
We are encouraged by Pakistan's newly appointed government's public endorsements of renewable energy projects and we look forward to playing our part in delivering on those promises, and also act as a torch bearer for others to follow."-PR