Return to search

China’s State Grid to build $1.5bn Pakistan power line

The Middle Kingdom is set to play a growing role in the South Asian country’s energy fortunes after the $1.8bn acquisition of a major utility by Shanghai Electric Power last October.

State Grid Corporation of China has signed an agreement with Pakistan’s Ministry of Water and Power to build a 4GW, $1.5 billion power transmission line.

The 878km high-capacity project, connecting the town of Matiari in the south to the city of Lahore in the east, is set to mark the first instance of foreign investment in Pakistan’s transmission sector, the government said.

China Electric Power Equipment and Technology Company, a subsidiary of China’s State Grid, said it would develop the project under the Build-Own-Operate-Transfer model and start construction in the first half of 2017, after receiving clearance from relevant authorities. Construction is expected to take about 20 months to complete.

The project is part of the China-Pakistan Economic Corridor, a bilateral scheme comprising $55 billion worth of power and infrastructure projects.

Once operational, it will likely be connected to a number of Chinese-backed plants in the south of Pakistan, according to China’s Assets Supervision and Administration Commission of State Council.

Last October, Shanghai Electric Power agreed to acquire a majority stake in Pakistan’s K Electric from The Abraaj Group for $1.8 billion. The utility generates and distributes power to Karachi, the country’s largest city, and its adjoining areas.