China's hydropower policy goes beyond its borders

China is world's largest producer of hydrolectricity. China's current hydropower policy does not only include construction of large domestic hydro projects but also includes major investments into hydro projects in neighboring countries.

One of these countries is Pakistan. It was recently announced that China will invest $1.65 billion  to jointly develop $1.65bn Karot hydropower project with the Pakistan Private Power and Infrastructure Board.

The 720MW Karot hydropower project is being constructed on the Jhelum River in Kahuta Tehsil in Rawalpindi district, and is scheduled to be commissioned in 2020. Once developed, it should generate 3,436GWh of electricity annually for the power hungry Pakistan.

This represents the first investment of the $40 billion China's Silk Road Fund since its launch, and the deal has been signed on the sidelines of Chinese President Xi Jinping's visit to Pakistan.

It was also announced that China plans to invest in 3,350MW of hydropower projects in Pakistan. Silk Road Fund is also able to extend the loans by partnering with Export-Import Bank of China and other financial institutions.

This announcement is another proof that China has become number one player in building and financing the hydroelectric power projects in Southeast Asia.