The 720 MW Karot hydropower project, which was completed in June 2022, symbolizes the strengthened China-Pakistan partnership focusing on energy security and climate change. As part of the China-Pakistan Economic Corridor (CPEC), it provides sustainable energy, improves Pakistan’s energy mix with clean energy, and reduces dependence on fossil fuels, in line with the development initiatives of both countries and demonstrating international cooperation. It also has economic clout and is a game changer for Pakistan. The economic impacts of the Carrot Project are wide-ranging. With an investment of US$1.657 billion, the project directly impacts the Pakistani economy by creating job opportunities and generating significant revenues. Throughout the construction phase, approximately 5,000 local workers were employed, and the operational phase will continue to provide permanent employment, aiding local economic development. In addition, the initiative will generate significant tax income for the Pakistani government amounting to Rs. 10.7 billion taxes and Rs. 20.234 billion in water use fees over the next thirty years
The economic boost brought by Karot (KHP) extends beyond its direct financial inputs. The project significantly enhances energy security in Pakistan and ensures stable access to energy for both industrial and residential sectors, which is essential for sustainable economic growth. By reducing reliance on thermal power generation, the project strengthens the country’s energy independence, promoting a more stable economy.
It includes environmental sustainability as a green energy solution. In the face of climate change, the Karot Hydropower Project offers a renewable energy solution for Pakistan, significantly reducing carbon dioxide emissions by 3.5 million tons per year. Using the energy of the Jhelum River, this initiative advances Pakistan’s goal of enhancing the share of renewable energy in the power grid, promoting a cleaner and sustainable future.
As the international community moves toward greater environmental awareness, KHP is setting the standard for hydropower projects around the world. Approximately 3.206 billion kWh of energy produced in Karot every year is clean and reliable, providing a sustainable solution to energy scarcity in Pakistan
An important element of the Carrot Hydropower Project is the Community Investment Plan (CIP), which ensures that communities benefit not only from electricity generation but from improved infrastructure and health services as well as educational opportunities. A fixed amount of Rs. $652 million, CIP focuses on projects that directly improve residents’ quality of life, such as building schools, health facilities, and roads. Scholarships for nearby students ensure that the next generation has the capabilities needed to succeed in a rapidly evolving environment.
These investments not only reduce poverty, but also help achieve the region’s broader development goals. CIP’s focus on community development ensures that the Carrot Hydropower Project is not just a source of energy; It serves as an engine for comprehensive regional progress. Through these efforts, the project began to improve lives, as prefabricated projects such as water supply systems and access roads contributed to improving living conditions.
The Karot Hydropower Project sets a new standard for sustainable infrastructure in Pakistan, by matching short-term energy requirements with long-term benefits. Under the build-own-operate-transfer framework, private investors finance and supervise the project for 30 years before it is transferred to the provincial government (Punjab). This model maintains high standards and reduces financial pressures on the government, but it also poses challenges. The private sector bears the initial financial risks, and after three decades, the government needs to be adequately equipped to handle the project while ensuring its sustainability. Careful planning is critical to a smooth transition and sustainable operational success, making the Carrot project a prime example.
As the KHP project moves into its operational phase, it stands as a great reminder of the potential that cross-border cooperation offers in addressing complex issues such as energy security, climate change, and economic progress. The China-Pakistan Economic Corridor framework has successfully united China and Pakistan in ways that have reshaped the energy sector, and the completion of the KHP project demonstrates how carefully designed strategic initiatives can provide significant benefits to both countries.
The KHP project serves as a model for upcoming infrastructure developments, not only within the China-Pakistan Economic Corridor but also for other areas seeking sustainable energy alternatives. Its combination of economic, environmental and social impacts underscores the need to take all aspects of development into account when embarking on such ambitious projects. Through the nuclear power project, Pakistan and China have not only provided a sustainable energy alternative, but have also created a global standard for what can be accomplished when countries cooperate to achieve a common goal.
In the future, the Carrot Project will remain a symbol of the enduring alliance between Pakistan and China, one that goes beyond simple infrastructure to promote lasting and beneficial transformation for the people of the region.