KP Offers Great Opportunities Of Investment In Hydel, Petroleum, And Mineral Resources: Report Revealed

Bestowed with a unique geo-strategic location and plenty of natural resources, Khyber Pakhtunkhwa (KP) offers great opportunities for investors to invest in hydel energy, petroleum, and mineral resources to gain maximum profit besides taking advantage of government investment-friendly policies

PESHAWAR, (UrduPoint / Pakistan Point News - 21st Jun, 2023 ):Bestowed with a unique geo-strategic location and plenty of natural resources, Khyber Pakhtunkhwa (KP) offers great opportunities for investors to invest in hydel energy, petroleum, and mineral resources to gain maximum profit besides taking advantage of government investment-friendly policies.

Besides Indus, Kabul, and Swat Rivers, Khyber Pakhtunkhwa all small and big rivers including Kunhar, Punjkora, Khayali, and Kurram with warm water throughout the year have plenty of sites for the construction of water reservoirs to cater to the growing energy and water demands of the people.

Due to the lack of dams and infrastructure, precious water was being wasted making negative effects on industries, agriculture, aquatic and human resources.

The position paper on the issues related to KP's document has revealed that the province had been unable to utilize approximately three million acres feet (MAF) of its share of water against its allocated 8.78MAF share determined by the Apportionment of the Waters of the Indus River System (1991), which made up to 34pc of share and was being presently utilized by the lower riparians.

"Owing to this huge non-utilization of water, KP has sustained a loss of around Rs112 billion since 1992," the report revealed.

"This huge water loss is posing serious challenges to agricultural and economic productivity besides food security," said ZA Malik, former Chairman, of the Economics Department, University of Peshawar while talking to APP.

Out of the 60,000MW hydel power potential of Pakistan, he said that about 30,000MW hydel power, potential existed in KP that needed to be tapped.

The untapped hydel power potential of KP has increased the gap between supply and demand of electricity during summer, resulting in an increase in load shedding mostly on high line losses feeders in peripheries of Peshawar, Bannu, DI Khan, Karak, Lakki Marwat, and merged tribal districts.

PESCO Power Distribution Company spokesman told APP on Wednesday, "KP is currently receiving about 1873MW electricity from the national grid while its demand is about 3220 MW, thus facing a shortfall of 1347 being fulfilled through load management." Dr ZA Malik said China had constructed about 98,000 dams and India 5,334 dams while Pakistan has built only 150 dams since its independence and no big dam after Turbela.

He urged Federal Government to assist KP Government in the construction of new dams, and that a scheme needed to be put in place for compensation to KP for its non-utilized share of water by the provinces which use the same.

As per the power generation policy 2015 approved by the Council of Common Interest (CCI), he said, "Water user charge (WUC) is to be paid at the rate of Rs0.425/KWh by the private sector hydropower projects to the provinces where the project is allocated." He said, "The rate of WUC is to be reviewed every five years by the Federal Government to determine if an increase in WUC is necessary.

He said for projects located in more than one provincial jurisdiction, the sharing of WUC would be decided among stakeholders on case to case basis and a review of WUC which was due in 2020 is yet to take place.

According to the said document, "CCI has endorsed Rs128 billion as KP share under net hydel profit (NHP) and Rs 52 billion as Punjab share of NHP for FY 2016-17 based on Kazi Committee Methodology (KMC)." Later on, a boxing committee for the solution of payments of NHP to the provinces was formed that completed its findings in 2022 and recommended the transfer of hydel power stations to the provinces and the announcement of a second interim arrangement with an enhanced rate of NHP.

"Currently, the water storage component of Wapda development projects is financed out of PSDP whereas the powerhouse component is met through Wapda revenue leaving no surplus cash for payment of NHP to the provinces." "This mechanism needs to be reviewed so that the powerhouse component is financed from PSDP funds thereby leaving surplus cash for payment of NHP to the provinces." "KP Government has urged the placement of the box committee report before CCI for consideration and an outstanding payment of Rs 62 billion for FY 22-2023 should be made to KP to address its financial issues amicably." As per the 1973 constitution, Dr Malik said, "The concerned province in which the hydroelectric station is situated shall be paid net hydel profits and the Cheshma Right Bank Lift Canal needs to be taken to its logical conclusion and funds should be provided from public sector development programme to bring white and green revolution in KP." Engr Zahoor Hussain, Director Projects, Wapda (North) said, "72 percent of work on multipurpose Kurram Tangi (Stage-1) Bannu and North Waziristan has been completed and is expected to be inaugurated in November next year.

" He said design and feasibility studies of its stage II were under a process that would be completed with loan assistance from Asian Development Bank (ADB).

Engr Zahoor said 1.2 million acres feet of water would be stored and 80.9MW of electricity to be generated from Kurram Tangi Dam, adding over three million people of southern districts of KP would be directly benefited.

"Besides the completion of the 108MW Golen Gol dam in Chitral, the government has accelerated work on the Mohmand dam of 800MW with 1.293 MAF water storage capacity that after completion would supplement/irrigate 160,000 acres of existing land and about 18,237 acres of new land with annual benefits of Rs2.23 billion." "Likewise, 300 million gallons of water per day will also be provided to Peshawar for drinking purposes with benefits of Rs.957 million from Mohmand dam. Mohmand dam would save Peshawar, Charsadda and Nowshera from floods having annual benefits in terms of flood mitigation was estimated at Rs1.467 billion besides producing 2.86 billion units of environment-friendly electricity to the National Grid every year with annual revenue of Rs. 45.76 billion. The overall annual benefits of the project stand at Rs. 51 billion." HVDC converter station Nowshera would be linked by an HVDC transmission line to efficiently transmit electricity from hydropower-rich Kyrgyzstan and Tajikistan via Afghanistan and onward via Torkhum to Afghanistan.

The federal government has allocated Rs 205.38 billion for power sector projects (HPP) in the budget 2023-24 including 2,160 MW Dasu HPP (Rs 58,597 million), 1,410 MW Tarbela IV Extension (Rs 590 million), 969 MW Neelum Jhelum (Rs 4,828 million), and 1,530 MW Tarbela V Extension (Rs 4,449.463 million).

Major transmission projects such as CASA-1000 (Rs 16,099.255 million), Dasu Evacuation (Rs 5,667.094 million), Suki Kinari Evacuation (Rs 13,800 million), and AMI IESCO project in the distribution sector (Rs 3,000 million) in budget 2023-24.

"Additionally, eight projects for supplying electricity to Special Economic Zones (SEZs) have been allocated a total of Rs 7,267.352 million and by the end of June 2024, the transmission sector is expected to have an additional capacity of 3,750 MVA on the 500kV grid and 6,900 MVA on the 220kV grid. The transmission lines will be extended by 522 km on the 500kV level and 668 km on the 220kV level," he added.

Resultantly, 6,985 villages would be electrified and 1,403,592 consumers for Distribution Companies (DISCOs) would be facilitated besides extending distribution lines of 132 kV by 1,843 km, and the capacity of 132 KV grids would be strengthened by 4,199 MVA.

KP Energy Department spokesman said that 36.6MW Daral Khwar HPP Madain Swat was completed and electricity generation with over Rs1.3 billion annual benefits started. Likewise, 300MW Balakot HPP worth Rs 85 billion approved by ECNEC would be constructed on River Kunhar in Mansehra.

About 10,000 MW projects are in different stages of implementation with a potential to generate about Rs100 billion annual revenue and efforts are on to utilize the remaining 14,000 MW through construction of new hydropower projects.

Three hydropower projects (HPPs) amounting to Rs 177.244 billion including the construction of 96 MW Batakundi amounting to Rs 40 billion and 188MW Naran of Rs70 billion Manshera would be developed with the collaboration of International Finance Corporation (IFC) in Shangla. Feasibility study of 20.8MW Shangla HPP completed.

496MW Spat-Gah HPP amounting to US$ 1,015 million is being developed for which MoU between KP government having 26pc shares and M/S Korea Hydro and Nuclear Power Company (KHNP) with 74pc share was signed. Gabral Kalam and Madyan HPP having 245MW capacity would be constructed with Rs115 billion.

Modification in Malakand-III HPP amounting Rs 778 million initiated to generate additional 154 GWh electricity with Rs 382 million annual benefits. Work on seven different HPP having cumulative generation capacity of 214MW including Koto 69MW, Karora 11MW, Jabori 10MW, Matioltan 84 MW, Lawi 69MW, Capri Charkhel 10.2MW and Barando 6.5MW with Rs eight billion annual economic benefits were in different stages of completion.

Malakand-III (81 MW), Daral Khawar (36.6MW), Ranolia (17 MW), Pehur (18 MW), Machai (2.6MW), Shishi (1.8MW), and Reshun (4.2 MW) with accumulative 161.2MW generation commissioned to generate Rs5.4 billion revenue annually.

About 12.8 million units would be saved having Rs 203 million in annual economic benefits after converting 4,000 mosques to solar energy.

More hydel power projects were required for the conservation of water and arresting the problems of energy shortfall and load shedding for economic growth and prosperity.