Shu Yinbiao, chairman of the State Grid (middle, front row), celebrated with his peers after the company won the bid for the Matiari-Lahore DC power transmission line. [Photo/Xinhua]
China Electric Power Equipment and Technology Co Ltd or CET, a subsidiary of State Grid Corp of China, said it will participate in the largest direct-current high-voltage transmission project along the China Pakistan Economic Corridor.
The 910-km, 660-kilovolt Matiari-Lahore DC transmission line, a project to be built on engineering, procurement and construction or EPC basis, also includes two converter stations. EPC contracts are common in the construction industry.
The transmission line is being constructed as part of the China-Pakistan Economic Corridor or CPEC. It starts from a converter station at Matiari near Hyderabad city in Sindh province and ends at Nankana Sahab near Lahore city in Punjab province.
The contract is worth over $1.76 billion and will take 27 months to construct, according to CET. Construction would begin soon, CET said.
"The project, once completed, will help transmit 4,000 MW of electricity and fuel exports worth about 10 billion yuan ($1.44 billion) annually," said Zheng Baihua, deputy manager in general of CET.
Zheng said the project would mainly use Chinese products, standards, design and construction.
"The project is of great importance to sustain Pakistan's GDP growth. As per market consensus, it is expected to rise at a rate of 5 percent in 2017 and 5.5 percent in 2018, from a forecast rate of 4.7 percent for 2016," said Joseph Jacobelli, senior analyst of Asian utilities and infrastructure research at Bloomberg Intelligence.
"The construction ... should become another proof of SGCC's technical prowess. Just like in China, the project may be important to better distribute power from one location, which has high electricity generation resources, to faraway load centers," Jacobelli said.
The CPEC is a major pilot project under China's Belt and Road Initiative, highlighting energy, transport and industrial cooperation between the two countries.
Sun Weidong, the Chinese ambassador to Pakistan, said in a previous interview: "The corridor will come up with more business opportunities while providing tens of thousands of new jobs for locals."
According to the company, the project would improve power network structure in Pakistan, make full use of electricity, and promote bilateral relations and cooperation.
Between 2013 and 2016, CET has won more than 20 overseas orders from Africa, Europe and the US, which were worth $11 billion. The contract value posted double-digit annual growth rate in the same period, with 2015 alone accounting for more than $3.3 billion.
"All our overseas investments are making a profit so far, as we conducted scientific and strict reviews before decision-making," said Lv Shirong, deputy director of State Grid's international department.
The parent company said its total overseas investment exceeded $10 billion by June-end, and its overseas assets reached $40 billion.