Summary of proposed guarantee
Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.
- Project name
- Star Hydro Power Ltd.
- Project ID
- Fiscal year
- Guarantee holder
Korea Water Resources Corporation (K-water) acting on behalf of itself and other sponsors
Sambu Construction Company Limited
Daewoo Engineering and Construction Company
- Investor country
Korea, Republic of
- Host country
- Environmental category
- Date SPG disclosed
- December 06, 2011
- Project Board date
- January 26, 2012
- Gross exposure
- $161.0 million
- Project type
- Strategic priority area
- Environmental and Social Review Summary for Star Hydro Power Ltd. in Pakistan
This summary covers an equity investment and shareholder loans by K-water in Star Hydro Power Limited incorporated in Pakistan through KDS Hydro Private Limited of Singapore. The investor has applied for a MIGA guarantee of $161 million for a period of up to 20 years against the risks of transfer restriction, expropriation, and breach of contract.
Star Hydro Power Limited will build, own, operate, and transfer a run-of-river hydropower plant situated 120 kilometers northeast of Islamabad. The capacity of the plant will be 147 megawatts with annual production of 633 GWh. The total project cost is approximately $409 million. Electricity generated by the plant will be sold under a 30-year power purchase agreement with the state-owned National Transmission and Dispatch Company limited.
The project is situated in part on the Kunhar river, which marks the border between Azad Jammu and Kashmir (AJK) and the Khyber Pakhtunkhwa province of Pakistan, and in part on the Jhelum river in AJK. By supporting the project, MIGA does not intend to make any judgment on the legal or other status of any disputed territories or to prejudice the final determination of the parties' claims.
The project is also supported by the International Finance Corporation.
The project is a category A under MIGA’s Policy on Social and Environmental Sustainability. Click here to view the Environmental and Social Review Summary prepared by the IFC. In addition to the environmental and social documents disclosed through the IFC's ESRS, MIGA is also disclosing the Project's EIA Addendum (April 2011).
The project will help alleviate power shortages in Pakistan, lower the country’s average electricity generation costs, and reduce reliance on imported fuel oil. Further, the project reduces the country’s greenhouse gas emissions and it is also expected to generate new jobs during construction and operation periods.
The project is aligned with the World Bank Group’s Country Partnership Strategy for Pakistan, which acknowledges that power is the country’s most pressing infrastructure need. In particular, the strategy calls for the development of renewable power generation, such as hydropower.
This proposed project is also aligned with MIGA’s strategic priorities of supporting investments in complex infrastructure projects, South-South investments, as well as investments into countries eligible for assistance from the International Development Association.