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On 23rd March 2013 Hubco has written a new chapter in Pakistan's history by commencing operation of country's first ever private sector hydropower plant. Hub Power Company (Hubco) also enjoys the distinction of being country's first independent power plant (IPP). The Project has been developed on Build-Own-Operate-Transfer (BOOT) basis; it would be transferred to the Government of AJ&K free of cost at the end of a 25-year term.
This project having an installed capacity of 84MW has been constructed by Hubco's fully owned subsidiary, Laraib Energy at River Jhelum in Azad Jammu and Kashmir (AJ&K). The project will contribute 540 GWh of green energy annually to the National Grid under a 25 year Power Purchase Agreement (PPA) with National Transmission and Dispatch Company (NTDC).
In Laraib Energy Hubco owns 75% shares and balance 25% shares are held by the minority shareholders. Hubco also owns 1,292MW thermal power plant located at Hub, Balochistan, which is the first and largest power station that was financed by the private sector in Southern Asia during the 1990s and one of the largest private power projects in the newly industrialized world at that time.
The beauty of this project is that it islocated 7.5 km downstream of the 1,000MW Mangla Dam, a major multi-purpose water storage project commissioned in 1967. The Project did not involve the construction of a dam or reservoir nor would it affect the existing water management regimes. It will withdraw water released from the existing Mangla Dam and return that again to the main stem of the Jhelum River through a 6.5 km long tailrace constructed in a sub-channel of the River Jhelum.
Speaking on the occasion CEO of Hubco, Zafar Iqbal Sobani said, "This project will provide cheaper electricity and energy security to the country. Other benefits of the run-of-the river project include saving of around 135,000 tons of oil import valued more than of US$100 million per annum and reduction in carbon emissions".
The Asian Development Bank and other lending banks, multilaterals IDB, IFC and Proparco France and two domestic commercial banks National Bank of Pakistan and Habib Bank have played  a pro-active and constructive role in structuring the project and financing of the project, thus making this pioneering project becoming a reality.
The Project is not expected to materially affect upstream or downstream hydrology of the Jhelum River due to its run of river nature and is unlikely to cause any significant, lasting environmental and social impacts. The energy generated by the Project will be utilized through an in-out connecting arrangement with the double circuit 132 kVA Mangla/Kharian transmission line, which passes over the Project site. No right-of-way acquisition is needed since connection facility will be built within the Project site.
Hubco has created precedence and now it is up to the private sector of Pakistan to emulate such projects. Experts say Pakistan can produce hundreds of megawatts of electricity by establishing run of the river type hydro power plants. One such project was Ghazi-Brotha but since then no other project has been constructed.
Pakistan needs to generate low cost electrify because running power plants on fossil oil has become punitive and gas reserves are on the decline. Above all cost of hydel generation is low and it causes no pollution.