ISLAMABAD - The Economic Affairs Division (EAD) and Neelum Jhelum Hydropower Project Company (NJHPC) on Monday signed Subsidiary Loan Agreement worth $40 million, as it was a legal requirement for making loan agreement between Kuwait and Pakistan effective that was agreed on November 25, 2010.

Abdul Wajid Rana, Secretary EAD represented the Government of Pakistan while Lt. Gen. (R) Muhammad Zubair, CEO represented NJHP in the signing ceremony, said a press statement issued by the Economic Affairs Division on Monday.

A loan agreement amounting to $40 million was signed between Government of Pakistan and Kuwait Fund for Arab Economic Development (KFAED) on 25th November 2010 for the purpose of construction of Neelum Jhelum Hydropower Project. Signing a subsequently Subsidiary Loan Agreement between Economic Affairs Division on behalf of the Government of Pakistan and Neelum Jhelum Hydropower Project Company (NJHPC) a subsidiary of Water & Power Development Authority (Wapda) was a legal requirement to make the loan agreement effective.

The Neelum Jhelum Hydropower Project is located at Muzaffarabad district of AJK. Upon its completion it will generate approximately 1,000 MW of electricity. KFAED is one of the donors of this project. The other donors included Exim Bank China, 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.

APP adds: Speaking on the occasion, EAD Secretary said that negotiations with China were also going on for the funding of the project and expressed the hope that with the release of $40 million, the cash flow issue would be resolved to a great extent.

On the occasion, the CEO NJHPC said that 36 percent of the work on the project has been completed. He said that the Tunnel Boring Machine (TBN) has also reached Pakistan. He said that after completion of NJHPP, the machine would be utilized in other projects. He said the cost of the project has been increased due to depreciation in rupee value against dollar and several other market issues. He said that when completed the project would be generate Rs.45 billion.

Speaking on the occasion, Secretary Water and Power, Imtiaz Qazi said that government was focusing on development of hydel and coal power projects.

He said that owing to high energy cost and shortage of gas, the thermal electricity is getting out of reach and that is why the government is paying heed towards developing hydel and coal projects.

He said that with the inclusion of additional power in the national grid system, the power shortage crisis would be overcome within three years.

He said that Pakistan was also engaged in negations with Central Asian countries to import electricity, adding that a Pakistani delegation was in Almaty at present to discuss the import of power from the Central Asian countries.