|Kuwait has extended USD 40 million to Pakistan for the construction of the de sander a vital part of the strategic USD 333.3 billion Neelum Jhelum hydropower project.|
The Economic Affairs Division and Neelum Jhelum Hydropower Project Company signed Subsidiary Loan Agreement which was a legal requirement to make the loan agreement between Kuwait and Pakistan effective.
A loan agreement amounting to USD 40 million was signed between Pakistan and Kuwait Fund for Arab Economic Development on November 25th 2010 for the purpose of construction of Neelum Jhelum Hydropower Project.
The agreement was signed by Mr Abdul Wajid Rana of secretary EAD and Lt. Gen (R) Muhammad Zubair CEO of NJHPC. The Neelum Jhelum Hydropower Project is located at Muzaffarabad district of Azad Jammu and Kashmir and upon its completion it will generate approximately 1,000 MW of electricity.
KFAED is one of the donors of this project with the other donors being Exim Bank China and UAE and Saudi Fund for Development. This project aims at developing the National Power Generation System to meet the increasing electricity demand in the country and indigenous renewable energy resources, namely the hydro resources.
Meanwhile, the government has stepped up its efforts to get USD 448 million from China as Beijing had inked an agreement with Pakistan in 2009 and promised to release the loan amount in 2010.Now 2012 has started and the NJHPC has not receive the loan as yet.
A delegation of Chinese officials visiting Pakistan in December 2011 indicated to the Pakistani authorities that Chinese Exim bank will release the loan only when Pakistanís top leadership ask the Chinese counterparts.
An official said that top level intervention alone can help release the Chinese credit for this project of paramount importance. There are some reports that during the recent visit of the Chinese prime minister to India, the authorities in New Delhi had exerted pressure on him not to extend any financial help for Neelum Jhelum Hydropower Project as the project is being erected in the disputed area of AJK, as per the view point of Indian management.
So the top level intervention between the top leadership of both China and Pakistan is required to ensure the timely release of Chinese credit for smooth construction of the project which if delayed, will lead to Pakistan losing the water priority rights in Neelum River as India is also constructing Kishenganga hydropower project on the said river in held Kashmir. Under the treaty, the country which will first complete the project on Neelum River will have the water priority rights.