Azad Kashmir China Pakistan Economic Corridor CPEC

The Hydropower to Empower the Poor: an example from Azad Jammu & Kashmir-(I)

By Mazhar Iqbal Mazhar

Investing in hydropower energy projects to empower economically disadvantaged communities supports the idea of socially responsible investment.

It also aims to mutually benefit the investors and the communities served.

Pakistan Administered Jammu & Kashmir (commonly known as Azad Jammu and Kashmir or AJ & K) lies along the north-eastern region of Pakistan.

It is an emerging tourism hot spot that offers attractive investment opportunities to both foreign and local investors.

The region has a huge potential to provide safe and profitable investment opportunities in the clean and renewable energy sector.

The presence of Chinese construction companies in this region is due to China’s strategic involvement in the Belt and Road Initiative (BRI).

The BRI is a global infrastructure development strategy adopted by the Chinese government to invest in many countries and international organizations.

As a flagship project of the China-proposed Belt and Road Initiative (BRI), the China-Pakistan Economic Corridor (CPEC) has helped Pakistan to boost its energy and transport infrastructure. 

The Chinese firms in AJ&K

China has helped Pakistan to build a number of coal-fired, wind and photovoltaic power stations under the CPEC.

[i]Chinese firms are assisting Pakistan to increase energy generation capability through backing financially and building power plants.

However, only a few of the CPEC energy projects include hydropower as the coal projects make up about 69 percent of planned energy schemes.

The remaining are from renewables, mostly hydropower, with smaller portions of wind and solar.[ii]

Renewable and sustainable energy is an area where Azad Jammu and Kashmir offer attractive investment opportunities.

Renewable Energy

The International Energy Agency (IEA) recommends policies that enhance the reliability, affordability, and sustainability of energy.  

It includes renewables, energy efficiency, clean energy technologies, electricity systems and markets, access to energy, demand-side management, and much more.[iii]

The International Hydropower Association (IHA)[iv] considers that renewable hydropower is a reliable, versatile, and low-cost source of clean electricity generation and responsible water management.

‍Sophisticated hydropower plants are helping to fast-track the clean energy transition.

They are particularly good at providing increased volumes of power, storage, flexibility, and climate mitigation services.

Pakistan has 60,000 MW of hydropower potential in the country, of which only 7,320 MW has been developed.[v]

Pakistan’s unexploited hydropower potential largely lies in the northern regions including Gilgit-Baltistan and Azad Jammu & Kashmir.

The European Union has recently unveiled a €300 billion ($340 billion) alternative to China’s Belt and Road initiative claiming it to be the harbinger of the clean energy revolution in the world.

Against this backdrop, China’s thrust for clean energy infrastructure projects in the BRI- linked countries is highly likely to attract further push in the near future.

The Hydropower

Rising prices, shortages, cuts, and scarcity of fuel and energy are constant headaches to the people of poorer regions.

Also, energy poverty is at alarming levels in the regions such as Azad Jammu and Kashmir.

It is defined as “a lack of adequate, affordable, reliable, quality, safe and environmentally sound energy”.

Currently, hydropower is the world’s largest source of renewable electricity. It is estimated that hydropower could produce up to 6,000 terawatt-hours by 2050. This will be approximately twice as much hydropower generation as today.

China is fast progressing in transition to renewable sources of energy as it has hugely increased the installed capacity of hydropower, wind power, solar power, and biomass power plants.

Hydropower represents the largest share of renewable electricity production. [vi]Electrical energy from hydropower is obtained from turbines.

These are driven by flowing water in rivers, with or without man-made dams forming reservoirs. Description: See the source image

The Layout of the Karot Hydropower Project

Figure 1: The layout of the Karot hydropower plant

Hydropower’s storage capacity and fast response characteristics are especially valuable to meet sudden fluctuations in electricity demand and to match supply from less flexible electricity sources and variable renewable sources, such as solar photovoltaic (PV) and wind power.

The International Finance Corporation (IFC, 2021a)[vii] mentions that hydropower is beneficial for the following reasons:

  • It is a renewable energy resource that can contribute to sustainable development by generating cheap energy.
  • It reduces reliance on fossil fuels that carry the risks of price volatility, supply uncertainty, and foreign currency requirements.
  • Hydroelectric systems can offer multiple benefits.
  • This includes water storage for drinking, cleaning, and irrigation purposes, drought-preparedness, flood control protection, aquaculture, recreational sports facilities, etc.
  • It can allow more renewables such as wind and solar to be added to the system.

Hydro Power Potential in AJ&K

The hydropower energy generation in AJ&K can contribute to the economic development and social uplift of the communities.

It can help not only the residents by providing discounted energy but also the entire Pakistan to redress its energy deficit by adding more energy to the national grid.

The following table shows the potential of the hydropower sector in this region. 

Type of the Hydropower ProjectsNo.

Figure 2: Hydropower Potential in AJ&K, Source AJ&K official portal


[i] Columbia University .2019. China-Pakistan Economic Corridor Power Projects: Insights into Environmental and Debt Sustainability. (Available online) (Accessed 21 November 2021)

[ii] Daily Times. 2021. Energy projects under CPEC – Daily Times. [online] Available at: <; [Accessed 27 November 2021].

[iii] IEA (2021) The IEA works with governments and industry to shape a secure and sustainable energy future for all (available online) (Accessed 20 Nov 2021) 

[iv] IHA .2021. Facts about hydropower(Available online) (accessed 21 Nov 2021)

[v] IHA .2021. Country profile- Pakistan (Available online) (Accessed 20 November 2021)

[vi] WB (2021) Electricity production from hydroelectric sources (% of total) (Available online) (Accessed 21 November 2021)

[vii] 2021a. Hydroelectric Power: A Guide for Developers and Investors. [online] Available at: <; [Accessed 22 November 2021].

(To be continued)

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