China, Pakistan Finalize Third Major Hydropower Project in Disputed Kashmir within Span of Three Months

On July 6, Pakistani officials announced the signing of a $1.5 billion Azad Pattan hydropower construction project with Chinese state-owned contractor, China Gezhouba Corporation, that is to be situated in Pakistan-administered Kashmir (PoK). This is the third such hydropower plant to be finalized with a Chinese state-owned company in a span of less than 90 days, notably, in a region claimed by both Pakistan and India.

Some experts believe that these projects, which have been under discussion for months have been expedited by Beijing and Islamabad against the backdrop of separate escalating border tensions between China and India, which have prompted both sides to take punitive economic and political measures against the other since May 2020.

Contracts for the other hydropower projects — the Diamer-Bhasha dam in Gilgit-Baltistan (undertaken by PowerChina Corporation) and the Kohala hydropower project in PoK  (undertaken by China Three Gorges Corporation) — were finalized in May and June 2020, respectively. Combined with the latest Azad Pattan project, the three plants are expected to generate 1800 MW of energy for Pakistan’s power grid and help alleviate the country’s chronic power shortage.

Still, like the Kohala project, Azad Pattan will be situated along the Jhelum river – a critical water source for the economic livelihood of the region. Accordingly, the project has raised concern among some local residents due to the environmental implications of damming the water resources.