Quick Facts

Where the impacts of the investment may be experienced.
  • Pakistan
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
  • International Finance Corporation (IFC)
Status: Active
Bank Risk Rating: A
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Board Decision Date: 2014-05-01
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower or Client: China Three Gorges South Asia Investment Limited
The holder of the loan, grant, or other investment.
The service or industry focus of the investment. A project can have several sectors.
  • Energy
Potential Rights Impacts:
Only for projects receiving a detailed analysis, a broad category of human and environmental rights and frequently at-risk populations.
  • Healthy Environment
  • Housing & Property
  • Labor & Livelihood
  • Right to Food
  • Right to Health
  • Right to Water
Investment Type(s): Equity
The categories of the bank investment: loan, grant, etc.
Investment Amount (USD): $ 125.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.

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Primary Source

Original disclosure @ IFC website
Updated in EWS: 2018-01-31
Disclosure Date: 2014-01-17
China Three Gorges South Asia Investment Limited

Project Description

The IFC is considering investment into China Three Gorges South Asia Investment Limited's (CSAIL) renewable power projects currently under development in Pakistan, which include the following:

(a) Three Gorges First Wind Farm Pakistan Limited will develop a 50 MW Three Gorges First Wind Farm Project in Sindh Province. It has 33 wind turbines of 1.5 MW each with 77 meter (m) rotor diameter with total capacity of 49.5 MW. The Initial environmental examination required by Pakistani regulation was approved by Sindh Environmental Protection Agency in February 2011. No environmental impact assessment was required under Pakistan regulations. Construction started in January 2013 and commercial operation is expected to start in October 2014.

(b) Wind Eagle Limited is developing a 100 MW wind project in Sindh Province. The project will be developed in two farms (Farm A and B, 50 MW each). The first version of the feasibility study was conducted in 2013 and an Environmental and Social Impact Assessment is currently being prepared at this stage.

(c) A 50 MW PV solar power plant called "First 50 MW Solar PV Power Project in Cholistan, Punjab Province" is also being developed. The initial environmental examination and environmental impact assessment were submitted to the Punjab Environmental Protection Agency and were approved in 2012 with no objections. A project design document for the Clean Development Mechanism under the United Nations Framework Convention on Climate Change is also being prepared for submission.

(d) Karot Power Company Limited, sponsored by CTGC and its local partner Associated Technologies Limited (Pakistan), is developing a 720 MW run-of-river Hydroelectric Power Plant project in Punjab Province and Azad Jammu and Kashir Province. The power house will be located in Punjab Province, and the dam will be built on the Jhelum River, which runs through both provinces. Initially the project was planned by the Pakistan government's Water and Power Development Authority, but it was taken over by the Private Power Infrastructure Board, and was then awarded to Karot Power Company Limited to develop the project. The initial environmental and social impact assessment was prepared by a consortium of international and Pakistani consultants in September 2009, based on an original project design consisting of a concrete dam (initially proposed at a height of 91m) and an underground power house. This environmental and social impact assessment was submitted to the Punjab Environmental Protection Department and Azad Jammu and Kashmir Environmental Protection Agency, and was approved by both agencies by 2011. After CTGC took over the project, the project's design was reviewed and is likely to be modified to use a rock fill dam (98.5m in height) and a surface power house. CSAIL plans to update the environmental and social impact assessment in 2014 to reflect the final design and to meet IFC Performance Standards, including preparation of a Resettlement Plan.

(e) The 1,100 MW run-of-river Kohala Hydroelectric Power Plant project is being built near Kohala, in the Azad Jammu and Kashmir region. The project company has not been established yet. Pakistan's Water Power and Development Authority initially identified the project and conducted a feasibility study. The Private Power Infrastructure Board issued a Letter of Interest to the CTGC group in 2009 and the project was transferred to CSAIL in 2012. The initial environmental and social impact assessment was prepared for the Water and Power Development Authority by a consortium of international and Pakistani consultants and was submitted to the Azad Jammu and Kashmir Environmental Protection Agency (EPA) in 2009. The EPA provided initial comments to the Water and Power Development Authority related primarily to the method for determining ecological flow. The project is designed to intake water from Jhelum River, upstream of Muzaffarabad, and discharge back to the same river at a point downstream. The environmental and social impact assessment prepared for the Water and Power Development Authority has not yet been transferred to CSAIL. CSAIL states that it will update the environmental and social impact assessment for the project in line with IFC Performance Standards.

(f) Lastly, a 300 MW 3rd Wind Farm Project and 50 MW Solar PV Project are being developed in Sindh Province. A single site has been identified to accommodate both projects, but detailed feasibility studies are still to be conducted. CSAIL is communicating with the Alternative Energy Development Board aiming to achieve an early implementation of this project. The site identified for the two projects has not yet been allocated to CSAIL. An environmental and social impact assessment is to be initiated in 2014.

Early Warning System Project Analysis

RISK CATEGORY: Category A.  According to IFC, "[t]his is a category A project primarily due to the potentially significant and diverse environmental and social impacts and risks associated with some of CSAIL's prospective business activities in Pakistan, particularly development and operation of large-scale greenfield [rural land that has remained largely unused] hydro power projects (e.g. Karot 720 MW and Kohala 1,100 MW on Jhelum River) and wind power projects (e.g. 300MW Third Wind Farm Project in Sindh Province)."


Based on the bank documents, these environmental and social policies are triggered:

PS 1 - Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 - Community Health, Safety and Security
PS 5 - Land Acquisition and Involuntary Resettlement
PS 6 - Biodiversity Conservation and Sustainable Management of Living Natural Resources

At this time IFC has not identified any impacts on indigenous peoples or cultural heritage, making IFC Performance Standards 7 and 8 inapplicable at this stage.

People Affected By This Project


The proposed solar and wind projects are estimated to have minimal social and environmental impacts. The following analyses are focused on the Karot and Kohala Hydropower Projects (Information is currently limited on Kohala HPP pending a revised environmental impact assessment).


Project documentation for the Karot Hydropower Project indicates a that there is high risk of injury to workers and local residents in the course of construction due to the existing steep mountainous conditions. Another group of potential risks for the workers is due to blasting works at the quarry or for road widening.

The following questions may be relevant in determining whether your community's labor rights may be adversely affected by the construction or operation of the Karot Hydropower Project:


According to the World Commission on Dams, "destruction of community productive bases in agriculture and fisheries can give rise to food shortages, leading to hunger and malnutrition."

Project documentation for Karot Hydropower Project depicts that the residents in the project area use the valley for traditional dwelling, crop cultivation and animal husbandry, timber production and fuel wood cutting. There are no industrial units or other economic activities from which the population of project area can make their living. Household income is earned by male family members who work as unskilled labor in the construction or transport sectors outside the valley and from traditional subsistence agriculture i.e. growing maize, wheat, vegetables, fruit and by keeping a few domestic animals. Potential consequences of land loss include loss of livelihood and means of subsistence.

The following questions may be relevant for local communities:


According to the World Commission on Dams, "[e]nvironmental change and social disruption resulting from large dams and associated infrastructure developments such as irrigation schemes can have significant adverse health outcomes for local populations and downstream communities." Issues include river pollution, vector-borne diseases, and accumulation of high levels of mercury in reservoir fish.

Project documentation for Karot Hydropower Project indicates the lack of adequate medical facilities in the project area, contributing to prolonged illness and mortality. The prevailing diseases in the project area were reported to be diarrhea, dysentery, pneumonia, typhoid and tuberculosis (TB) of lungs. The main reasons for those diseases are unclean drinking water, poor diet and unhygienic living conditions. During construction pollution may occur due to increase in sedimentation, deposition of hazardous waste material and discharge of the domestic and industrial waste-waters into the water bodies, which has the potential to exacerbate existing health problems in the area.

The following questions may be relevant for local communities:


CSAIL's hydroelectric power plants currently planned for development will have a dam height of between 91 and 98.5m for Karot Hydropower Project, and about 50m for Kohala Hydropower Project. The International Commission on Large Dams defines a large dam as being over 15m high. The NGO International Rivers identifies several environmental consequences of large dams, including: direct impacts to the biological, chemical and physical properties of rivers and riparian (or "stream side") environments. Dam walls block fish migration and alter a river's flow and sediment transport downstream, which may cause the extinction of aquatic species and upset ecological balance.

Project documentation for Karot Hydropower Project indicates that river hydrology and downstream flow of sediments will be substantially impacted during the construction and operation of the dam, which could affect downstream communities. Furthermore, during construction pollution may occur due to increase in sedimentation, deposition of hazardous waste material and discharge of the domestic and industrial waste-waters into the water bodies, which has the potential to create environmental health hazards in the area.

Project documentation for Kohala Hydropower Project indicates that, considering the significant length of affected river for Kohala and also that its affected river reach includes the Azad Jammu and Kashir region's capital city Muzaffarabad (population of 700,000 ) and other villages on the 60km stretch, project documentation indicates that a careful determination of guaranteed ecological flow is important to minimize adverse impacts of the Kohala project on the ecosystem services of the Jhelum River, especially to the city of Muzaffarabad.

The following questions may be relevant for local communities:


Large dams have been associated with adverse social impacts resulting from involuntary displacement. The World Commission on Large Dams reports that the construction of large dams has resulted in the involuntary displacement of between 40-80 million people worldwide. This estimate refers only to physical displacement, and does not include communities that have suffered livelihood displacement. The WCLD notes that [w]hile not all large dams have involved physical displacement it would be much rarer to find a river whose natural function is not used or appreciated by people in some fashion.

Resettlement programs for the internally displaced may also result in human rights violations. For example, in Pakistan's Tarbela dam resettlement program allotted agricultural land was of poor quality and basic services such as electricity, health facilities and schools were not provided. Electricity was only provided after 25 years.

Project documentation for Karot Hydropower Project indicates that the demand for land during construction will be significant as it will be acquired for dumping of waste material from the dam's construction works, road widening and underground works. In particular, this will affect the arrow Karot valley, where the soils are very fertile in comparison to the Jhelum River slopes, the impact on soil and natural land properties will be significant. The environmental impact assessment emphasizes that disposal of the excavated materials should be done on barren land as the agriculturally productive lands in the project area are already in short supply.

Additionally, project documentation for Karot Hydropower Project estimates that up to 10 households will need to be relocated during construction, affecting up to 70 people. In order to address any problems stemming from relocation, a brief Resettlement Plan has been prepared addressing compensation for the lost land, houses and properties, and land acquisition procedures. Additionally, project documentation provides that a Grievance Redressal Committee will be constituted and established at the district level in Rawalpindi, which will look into all the grievance cases.

The following questions may be relevant for determining if your community has been adversely affected by construction or operation of the dam:


Scholars have recognized that, in the same way that reservoirs trap river sediment, they also trap most of the nutrients carried by the river and result in oxygen depletion in the water. Water that is "'poor in dissolved oxygen can 'suffocate' aquatic organisms and make water unfit to drink. Dissolved oxygen, furthermore, is vital to enable bacteria to break down organic detritus and pollution."

Project documentation for Karot Hydropower Project indicates that the availability of water is the major concerns for the inhabitants of the project area. Existing water resources for locals are limited. Surface water is available in the river and Nullah but is not suitable for drinking purposes. Groundwater resources are available at limited scale, and are only used for drinking purposes through wells and water pumps, which are either operated manually or by electricity. Possible groundwater pollution from waste disposal may further threaten an already limited water supply.

Project documentation also indicates that impacts on riverine water quality may occur from the laborers camps and related sewage disposal. The sewage may have immediate pollutive effects. Other potential impacts on the water quality of the river water might be caused by various chemicals used for processing. These risks include pollution of water by cement, gravel, rock, sand, fuel, lubricants and oil residues/spills from vehicles and machines. Furthermore, the reduced dilution of wastes (both human and animal) attributed to slower flows during operation may affect riveting water quality to such an extent that water treatment is required.

The following questions may be relevant in determining whether your community's right to water has been adversely affected by the construction or operation of the dam:

Investment Description

IFC's contribution would be an equity investment of up to US$125 million in China Three Gorges South Asia Investment Limited ("CSAIL"), an investment holding company formed in September 2011 that will acquire, develop, build, own and operate renewable power generation projects in Pakistan. CSAIL aims to become the largest renewable power company in Pakistan. The project aims to secure an investment of around US$15-20 billion to develop 10,000MW of additional generation capacity in the next 5 years.

When the IFC makes an "equity investment" it obtains some percentage ownership in the project's sponsoring company, which means IFC involvement with that company continues after completion of the project.

Private Actors

CSAIL, a wholly owned subsidiary of CWE Investment Corporation (“CWEI”) through CWEI Hongkong Investment Company Limited is a holding company for investment in Pakistan under which single purpose vehicles will be formed for the project financing of each of the projects. CWEI is the overseas investment subsidiary of state owned China Three Gorges Corporation (“CTGC”). CTGC is one of the largest power companies in the world that owns and operates several multi-stage hydro, solar and wind generation projects in China and globally, with a cumulative capacity of over 50,000 MW.

Founded in August 2011, CWEI is a wholly owned subsidiary of CTGC and serves as the dedicated overseas investment platform, responsible for investment, construction, operation and management of the international businesses of CTGC. Leveraging on the financial strength and technical capabilities of CTGC, CWEI is pursuing the development of hydro, wind and solar generation projects across South Asia, Southeast Asia, Europe, America and Africa. CWEI is also the largest shareholder in Energias de Portugal (“EDP”), which is an integrated utility company that generates, distributes, and supplies electricity in Portugal and through EDP Renovaives, it is one of the largest wind power producers in the world. 

CWEI will maintain a majority 51% equity stake in CSAIL until a Qualified Public Offering and in addition to IFC, other regional and international institutional investors, including development financial institutions, sovereign wealth funds and private equity funds are expected to take minority shareholding in CSAIL.

Contact Information

CSAIL's office in Islamabad:
Name and Title of the contact person: Kang, Shengzu, Commercial Manager
Address: House No.5, St.72, F-8/3, Islamabad
Telephone: +92-51-843960
Email: shengzu.kang@gmail.com
Website: Not available

CSAIL's office in Karachi:
Name and Title of the contact person: Gu, Dongxu, Administration Manager
Address: House No. 75/I, H Street, Phase 6, DHA, Karachi
Telephone: +92-21-35842285
Email: gudongxu@live.com


According to the IFC, CWE Investment Corporation's perspective projects, three solar/wind power projects and two large HPPs, are at an early development stage with limited project development activities on the ground. As such, current engagement with local communities and stakeholders are being conducted by the engineering consultant and aimed mainly at facilitating temporary land leases for geological surveys.

IFC states that, as a condition of IFC's investment, CWE Investment Corporation will develop a stakeholder engagement plan for the Karot Hydropower Project based on the Good Practice Handbook on Stakeholder Engagement published by IFC in 2007, meeting Pakistan's mandatory requirements on stakeholder engagement. The stakeholder engagement plan will include identification of local stakeholders such as affected communities, local government authorities, non-governmental and other civil society organizations, local institutions and other interested or affected parties. The stakeholder engagement plan will also propose an engagement program that will cover the process of socio-economic survey and continue through the land acquisition, compensation, physical relocation, design and constructing of replacement housing, and community program development.


The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/

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