Agra International, a wholly-owned subsidiary of Canada's Agra Industries has signed a memorandum of understanding with the local Laraib Energy to jointly develop a 45-MW hydroelectric power project on the canal flowing from the Mangla Dam Powerhouse on Pakistan's Jhelum river.

The companies have agreed to commence a financial and technical feasibility study for the project. The joint venture would finance, design, procure, construct and own the facility. The power generated would then be sold to Pakistan's national power grid. It is estimated that the project will cost around $115 million.

The government has adopted a policy of encouraging private investment in order to meet the country's growing energy requirements. The project would be one of a growing number of power projects to be constructed on a build-own-operate (BOO) basis. Pakistan has pioneered the concept, bringing the Hub power project to a financial close in 1995, (Power, MEED Special Report, 11:8:95, page 34).