PAKISTAN PROVINCIAL SERVICES ACADEMY

PESHAWAR

Analysis paper
on PPP

Ranolia Hydropower Project Besham KP 1

(93rd Pre-Service PMS KP)

Directing Staff: Dr. Muhammad Bakhsh

(18-06-2025)

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The data and information reproduced in this case study has been collected from various official and sources, officials
working on the project, ADB documents, District Administration, and internet sources.
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Introduction
Pakistan has two integrated public sector power utilities, the Water and Power Development
Authority (WAPDA) and the Karachi Electric Supply Corporation (KESC). WAPDA supplies power to
the whole of Pakistan except the metropolitan city of Karachi, which is supplied by KESC. The system
of WAPDA and KESC are interconnected through 220 KV double circuit transmission lines. The
country has a total installed generating capacity of about 19522 MW. The installed capacities are
owned by various agencies operating in the country. These are: Water & Power Development
Authority (WAPDA): 11327 MW, Karachi Electric Supply Corporation (KESC): 1756 MW, Pakistan
Atomic Energy Commission (PAEC): 462 MW, Independent Power Producers (IPPs): 5977 MW.
WAPDA was established in 1958 and entrusted with a massive agenda, which included generation,
transmission and distribution of power along with irrigation, drainage and flood control etc. It
owned about 58% of the country’s total power generation capacity and served about 88% of all the
electricity customers in the country. It served over 13 million customers. WAPDA has now been
decentralized. Its distribution network has been divided into eight electric supply companies, which
are successors of former Area Electricity Boards (AEBs). The AEBs were departments within WAPDA
to administer the supply and distribution, construction, expansion and operation of the distribution
system. These AEBs have been re-structured in eight independent power companies, i.e., eight
distribution companies (DISCOs). Side by side three generation companies (GENCOs) and a national
transmission and dispatch company (NTDC) have been created. Presently, these entities are
incorporated under the management of Pakistan Electric Power Company (PEPCO). So far Kot Addu
has been privatized. DISCO at Faisalabad (FESCO) are next on line for privatization.
KESC was incorporated in 1913 and is responsible for the generation, transmission and distribution
of electricity in Karachi and its adjoining areas. It has nearly 1.5 million customers, predominantly
urban consumers. In order to promote fair competition in the electricity industry and to protect the
rights of consumers as well as producers and sellers of electricity, the Government of Pakistan has
enacted the Regulation of Generation, Transmission and Distribution of Electric Power Regulation
Act, 1997. Under this Act the National Electric Power Regulatory Authority (NEPRA) performs three
main regulatory functions i.e., licensing of generation, transmission and distribution of electric
power, tariff determination and prescription of standards and rules for conduct of business.
While we look back, between 1984/85 and 2004/05, Pakistan’s total installed power generating
capacity increased nearly fourfold, from 5229 MW to 19,522 MW. Thermal power plants
contributed 64% of the total, while hydroelectric power plants accounted for 33%, and Pakistan’s
two nuclear power plants produced 3% of the total. The electricity market in Pakistan has been
characterized in recent years by marked changes in the primary energy sources used for producing
electricity. In the fiscal year 1990/91, hydropower still accounted for nearly 45% of all electricity
generated in the country, but by 2001/2002 that share had dropped to only 26%. Simultaneously,
the share of thermally generated electricity increased from 54% to 71%. Most of that increase is the
result of capacity expansion since the early 1990s in response to power shortages and the resultant
frequent power outages. Pakistan has little commercially exploitable oil of its own. Consequently,
more than 55% of the country’s oil needs were met by imports in the fiscal year 2001/02. The
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imports were used for such purposes as firing thermal power plants. Plants fueled with natural gas,
however, operated almost exclusively on domestic resources but due to depleted natural gas
resources, now these plants also are dependent on imported LNG. This also applies to most of
Pakistan’s few coal fired power plants.
The safe and reliable transmission and distribution of electricity remains a major problem in
Pakistan. Due to weak grid infrastructure and substantial theft of electricity, losses from the
transmission and distribution network totaled some 30% in 2003/04. With the sole exception of
fiscal year 1998/99, power consumption has grown steadily in recent years. Between 1990/91 and
2003/04, total consumption increased by more than 84%, from 31 TWh to 57 TWh. Again, with a
single exception - fiscal year 1990/91 – the domestic sector was the consumer group with the
largest proportion of consumption, followed by industry and agriculture. The demand for electricity
will continue to rise in the years to come. An average annual increase of 7% has been postulated.

Background of the Study

Pakistan has adopted a systematic development plan called ‘Vision 2025’ that targets a long-term
capacity increase of around 35,000 MW by the year 2025. That would be nearly twice as much
power as was available at the end of 2002. Around two thirds of the additional power (22,563 MW)
is slated to come from hydroelectric power plants. New gas-fired power plants are supposed to
contribute 13% (4,680 MW), the same percentage as that to be generated by coal-fired power
plants (4,350 MW). New nuclear power plants with a total installed capacity of 1,800 MW (5%) are
planned. Finally, renewable sources of energy are supposed to account for more than 4% (1,500
MW) of the overall newly installed capacity. The planned expansion will cost approximately US$ 30
billion. In view of Pakistan's high national debt and persistent budget deficit, the government is
intensifying its efforts to attract private investors.
Pakistan’s total hydropower potential has been estimated over 40,000 MW, some 24,000 MW of
which could be easily harnessed, and approximately 6400 MW of which is actually being exploited.
More than 1000 MW micro/mini hydropower potential is available in northern mountainous region
of the country, of which less than 1% is being developed. Due to anticipated growth in demand and
of the fact that only about 20% of the available hydropower potential is being utilized, the ‘Vision
2025’ development plan provides first and foremost for the vigorous, multi-stage development of
hydroelectric power.
In northern Pakistan alone there is an estimated potential of 300 MW for micro hydropower plants
with installed capacities below 100 kW each. As of today, only about 10 MW of that potential had
been tapped by a total of some more than 300 projects co-financed by Aga Khan Rural Support
Program (AKRSP) PCRET, European Union (EU) and private developers. Now, with the assistance of
the Asian Development Bank and within the scope of Malakand Rural Development Project, 100
micro hydropower plants with ratings ranging from 5 to 50 kW are under implementation with in
and around Malakand Division of the Khyber Pakhtunkhwa province (KPK).

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Statement of the Problem
A reliable supply of power is critical to achieving Pakistan’s economic growth targets. ADB is the
country’s largest development partner in the energy sector. Under the government’s leadership, it is
working with other development partners and the private sector to expand the use of renewable
energy and broaden and strengthen the country’s energy mix. This includes financing hydro and gas-
fired power plants, supporting energy efficiency programs, and investing in innovative wind and run-
of-river hydropower projects.
The Ranolia run-of-river hydropower project is part of this effort to harness Pakistan’s rich clean
energy potential. Ranolia is one of two hydropower projects built by the Khyber Pakhtunkhwa
provincial government under the ADB-supported Renewable Energy Development Sector
Investment Program. The $510 million program—which is also financing four hydropower plants on
irrigation canals in Punjab province—is part of a broader national plan aimed at generating a total of
1,700 gigawatt-hours of power annually, enough to service about 600,000 new connections or 4.8
million people. “It was a challenging project in terms of attending to detailed engineering aspects in
view of the terrain, and also for catering to the environmental and social safeguard standards. This
was the first big project in this remote village so expectations were high. The electricity produced by
the project will go into the national grid and most villages have their own micro-hydro power for
local electricity needs, so initially we had a hard time convincing them of the value of this
development initiative.” (Mr. Khuda Baksh, the Project Manager for the contractor, Descon).
The project brought significant local benefits as well. A key opportunity was employment, with just
over 2,000 local jobs created during construction. Of those, about 150 were skilled workers, many of
whom will continue to work at the facility. In addition to employment and other benefits, the
project upgraded a key road improving access to schools, hospital, and markets in the nearby town
of Besham. People of Ranolia are also proud that the 17 megawatts of electricity produced by the
plant is enough to light up a small city, will be put into the national grid to help the country as a
whole. This run-of-river hydro-power project is expected to recover the investment in three years,
and then it will start earning profit using water as the fuel.
Ranolia’s construction began in November 2011 and finished in November 2015, one year later than
the estimated time. For the first two and half years after the construction work completed, Water
and Power Development Authority (WAPDA) couldn’t install the transmission lines to supply the
electricity to the national grid. As a result, the power generation machines were lying idle and
couldn’t generate even a single unit of power during this time when the country was experiencing a
severe power shortage.
Then, in May 2017, the transmission line was stretched and the facility was connected with the
national grid but the agreement with KPK government was not finalized, therefore, power
generation couldn’t start until October 2019. However, after six months, engineers had spotted
defects in the project designs and thus, the power generation was stopped once again.

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Despite spending Rs3.2 billion on the 17-Megawatt (MW) Ranolia run-of-river hydro-power project,
the (KPK) government is still deprived of its benefits as the project could hardly generate 3 MW
electricity due to technical issues.
It is a reality on ground that the power transmission line from Ranolia is also connected with three
other WAPDA projects of Alai Khwar, Khan Khwar and Dabir Khwar. This means that the suspension
of power supplies from Ranolia have also stopped power supply from the other three projects. In
April, WAPDA cut off the power supply and water from Ranolia was diverted to Farbe. When water
was discharged from the spillway, it deluged an entire village.
According to KPK Energy Development Organization (PEDO), discharge of water from the spillway is
actually a design problem and its replacement is the responsibility of the project contractor.
Similarly, the road leading to the spillway has been closed by the locals. Rs. 50 million was released
to the district administration to solve the flooding crisis but so far, the land couldn’t be purchased
from the locals. When a full load test was carried out on Ranolia, it could hardly generate 3 MW
instead of the estimated 17MW.
According to PEDO, the construction work of the project is complete; however, it will remain with
the contractor until the project generates 17MW electricity. The officials added that the water flow
is likely to be very high from May to August. The possibility of generating 17 MW of electricity
before May is unlikely. Similarly, the contractor has demanded an additional Rs. 800 million.
Therefore, the matter has been referred to the dispute resolution committee, which will take a final
decision in this regard.
Despite spending Rs3.2 billion on the 17-Megawatt (MW) Ranolia run-of-river hydro-power project,
the KPK government is still deprived of its benefits as the project could hardly generate 3 MW
electricity due to technical issues. The project also has not been handed over to the management by
the contractor.
Technical Details of the Project

Name of the Project: 17 MW Ranolia Hydropower Complex

Location: Ranolia Khwar (District Kohistan), KPK

SALIENT FEATURES:

Hydrology
Catchment Area 73 km2
Mean Annual Discharge 4.33 m3/sec
Total Annual Flow 136 million cubic meter

Diversion Dam
Type Low height concrete diversion weir
Crest Elevation 1120.50 masl
Crest Length 20.0 m

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Maximum height 3.0 m from river bed level
Design Flood (Q100) 854 m3/sec
Spillway
Type Overflow weir
Design Discharge (Q100) 854 m3/s

Intake & Headwork structures

Intake Side intake –gate controlled
Approach canal Rectangular – reinforced concrete
Settling Basin / Sand trap Reinforced concrete 75.5 m X 16.5 m

Headrace Canal
Length 2,650 m
Type Reinforced concrete
Dimensions Rectangular, 2.5 m X 2.0 m
Bed slope 1:1000
Siphon with inlet and outlet ponds
Type Mild steel pipe, 1.5 m inner diameter
Length 830 m
Maximum head 170 m
Penstock
Type Mild steel
Length 684 m
Diameter / thickness 1.50 m internal dia. 12 mm to 18 mm thickness
Power Facilities
Powerhouse Type Surface
Dimensions 28 m x 18 m
Gross Head 408.90 m
Net Head 404 m
Turbine (2 units) Pelton, 2 X 8.5 MW
Generators (2 units) Rated capacity 8.5MV x 2, Power factor 0.8
Transformers Rated output 12.5, Voltage11/132 kV
Installed capacity 17 MW
Average Energy 100.5 GWh
Transmission Facilities:
Transmission line length 132 KV – about 2 Km and 11 KV about 4 Km

Objectives: Adding cheap and clean energy into the system

Benefits:
Bulk and cheap energy supply into national grid. It is also source of revenue for PEDO and
Govt of Khyber Pakhtunkhwa.

Questions for discussion: -

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1. Under what organizational setup the project has been developed.
2. What laws, rules, regulations and public policy framework provides
validity to the project.
3. What are the financial arrangements for the project?
4. Trace out the sequential events of the process of implementation of the
project.
5. Discuss the positive aspects of the project.
6. Discuss the negative aspects of the project with special reference to not
achieving its objectives.
7. What are your recommendations for the management of the project at
this stage?
8. Compare with any successful model of a hydro-power project and
propose standard Policy, system, procedure, processes and
implementation strategies that may lead such future identical projects
successful projects