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Project Financing of Hydropower Project in Pakistan


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Pakistan The Project Risk Management program indicates a construction period starting in 2011 with completion scheduled four years later.

Project company: Star Hydro Power Limited (“SHPL”), a Special Purpose Vehicle incorporated in Pakistan for the purpose of developing the Project. SHPL is 100% owned by KDS Hydro, a Singapore special purpose vehicle formed by the Project’s Sponsors.

Sponsors: the Project’s lead Sponsor is Korea Water Resources Corporation (“K-Water”), a Korean state-owned company whose primary activity is the management of Republic of Korea’s water resources. The Project’s other Sponsors are: Daewoo Engineering & Construction Company (“Daewoo”), a leading Korean construction and engineering company and Sambu Construction Company Limited (“Sambu”) a Korean leading construction company. K-Water is expected to hold 80% of the shares in KDS Hydro while Daewoo and Sambu each holding 10% of the shares in KDS Hydro.

Total project finance cost is estimated at circa $ 380-400 million (including contingencies). Hindmarsh LLC t/as Hindmarsh Finance has arranged for an IFC senior loan (A Loan) of up to $50 million.

The Operational Risk Management design involves the construction of a weir across the Kunhar River, near the village of Patrind, about 12 km downstream of the Garhi Habibullah Bridge. The Project will divert a portion of the water of the Kunhar River through a tunnel to a powerhouse on the right bank of the Jhelum River near Muzaffarabad. Power will be delivered to a switch yard on the left bank of the Jhelum River which will be connected with the NTDC grid.

Since the Project is run-of-the-river power project diverting water from the Kunhar River into the Jhelum River, approximately 13 km upstream of their confluence, the Project will not place undue risks upon existing infrastructure and will not reduce water flows of the Jhelum River

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