Islamabad: Notwithstanding India's concerns, China has agreed to provide Pakistan $448 million for the Neelum-Jhelum hydropower project, currently underway in Pakistan-occupied Kashmir (PoK), work on which had slowed down due to a financial crunch.
International bodies had refused to fund the 969-MW project, being built on the Neelum river in PoK, as it is located in the disputed region of Kashmir.
India had flagged its concerns regarding Chinese activities in PoK during China's Premier Li Keqiang's visit to New Delhi last week.
The agreement with the state-run Export-Import Bank of China is a "significant development in efforts to secure requisite financial resources for the remaining works" of the project, official sources were quoted as saying by state-run APP news agency.
In addition to generating much-needed low cost hydro-electricity, the project is "equally important for Pakistan to establish priority water rights" on the Neelum, the sources said.
Pakistan's Water and Power Development Authority is making all possible efforts to complete the project by 2016.
Work at all sites of the project is "progressing satisfactorily", the sources said.
Out of the total of 67 km of tunnels, 34.24 km or 51 per cent had been excavated so far.
Excavation of the underground power house stood at 75.24 per cent and the transformer hall at 96.33 per cent.
The sources said 95 per cent of the work on a "de-sander" had been completed while Nauseri Bridge over the Neelum had also been built.
"Second stage diversion" of the Neelum had also been completed, they said.
The Neelum-Jhelum project is expected to contribute 5.15 billion units of cheap electricity every year to Pakistan's national grid.
Annual benefits of the project have been estimated at about Rs 45 billion.