In all the bravura of the recent $45 billion offer by President Xi Jinping of China to build roads, rails and dams in Pakistan, it was hard to decipher when construction would begin, and what in a long list of infrastructure projects would be tackled first.
One clue emerged in the announcement in the Chinese state news media last week, after Mr. Xi left Pakistan: A modest-size dam on the Jhelum River at a site 35 miles east of the capital, Islamabad, will be the first project financed by China’s $40 billion Silk Road Fund.
That fund was established to finance projects in China’s Silk Road Economic Belt and Maritime Silk Road, plans often cited by Mr. Xi that are intended to connect China to Europe over land through Central Asia and Russia, and by ports through a separate maritime route.
Power shortages in Pakistan are so dire — largely because few individuals or government departments, including the military, pay for electricity — that the country’s National Planning Commission estimated, in a report published in 2013, that a lack of energy reduced annual economic growth by at least 2 percent. Hydropower is seen as an answer.
The Karot dam, as the structure on the Jhelum River is to be called, is expected to cost $1.65 billion and will be financed on a commercial basis, the Chinese state news media said. According to the website of the People’s Bank of China, China’s central bank, the Silk Road Fund and the World Bank will buy shares in China Three Gorges South Asia Investment Ltd., a subsidiary of the Three Gorges Corporation, a state-run behemoth that builds dams at home and, increasingly, abroad.
The Silk Road Fund, along with the Export-Import Bank of China and the China Development Bank, will issue loans to the Karot Power Company, which is in turn a subsidiary of China Three Gorges South Asia Investment, for the construction.
The power generated by the dam will be sold to Pakistan’s national grid, a creaky system that leaks electricity and is run by utilities often described as ridden with corruption.
Pakistan’s need for dams fits neatly with China’s dam-building prowess. Chinese companies and banks are now the biggest builders and financiers of global dam-building. They are involved in some 330 dams in 74 countries, mostly in Asia and Africa, according to International Rivers, a nongovernmental organization that works to protect rivers and communities affected by dams.
China is not a newcomer to dams in Pakistan. Sinohydro, another state-owned company, built the Gomal Zam Dam in South Waziristan, in the ungoverned tribal areas where the Taliban freely operate. Several Chinese engineers were kidnapped during the dam’s construction.
Under the terms of the package announced by Mr. Xi, China has demanded protection for its workers at new projects, and the Pakistanis are delivering. According to Dawn, a Pakistani newspaper, the government is creating a new special army division of 10,000 troops that will be headed by a two-star general and dedicated to the Chinese workers. The force will include contingents from the Special Services Group, Pakistan’s elite commando force, and will have its own air support.
Since the completion of major dam-building projects in China, the Three Gorges Corporation has been hunting for business abroad, and it has been willing to take on environmentally risky projects where it has faced heated local opposition along the Amazon and in the rain forests of Sarawak, Malaysia, said Peter Bosshard, interim executive director of International Rivers.
But more recently the company has met with International Rivers to discuss environmental issues, Mr. Bosshard said. It was encouraging, he said, that the company was not embarking on building the $8.5 billion Diamer-Bhasha dam on the Indus River in Pakistan, which has long been delayed for a number of reasons, including potential environmental damage and social dislocation. That dam will have a generating capacity of 4,500 megawatts and would flood the farms of 35,000 people, International Rivers says.
By contrast, the Karot dam, according to the builder’s environmental impact statement, would generate about 720 megawatts of power and result in about 500 people losing their land. Construction is expected to start at the end of this year, Karot Power says.
There is a word of warning, however, from Bryan Tilt, associate professor of anthropology at Oregon State University, who has studied dam projects in China. It is difficult to judge, he said, the quality of the dam builder’s assessment on the number of people who would be forced to move.
“Punjab Province, where the dam is to be sited, is the most populous in Pakistan, so there will likely be population displacement associated with the project,” Mr. Tilt said in an interview.