Chinese Government provides $16.3 million loan for 18MW Naltar Hydropower Plant 4 Project

Project narrative

In December 2001, the Chinese Government and Government of Pakistan signed a $16,310,011 loan agreement for the 18MW Naltar Hydropower Plant 4 Project. The loan carried an 8.5 year maturity and a 5% interest rate. As of June 30, the loan was fully disbursed. The purpose of the project was to construct an 18MW hydropower plant near the village of Naltar Pine in Gilgit−Baltistan. A Chinese firm called CLIC (or Click) and Pakistan’s Ministry of Kashmir Affairs and Northern Areas (KANA) were jointly responsible for project implementation. A feasibility study was completed in 2000. The 18 MW hydropower plant was put into operation in October 2007. Then, in February 2012, the Gilgit-Baltistan Legislative Assembly constituted a committee, headed by the provincial minister for power Wazir Shakeel, to investigate corruption charges in the 18 MW Naltar Hydropower Plant-IV Project. The committee was also given a mandate to investigate technical deficiencies in the design of the project, which apparently led to cracks in the reservoir. A group of engineers reported that aquatic worms or insects apparently ate the concrete, which led to the widening of cracks in the walls of the reservoir.