A consortium of Sogreah and Cegelec of France, and Sweden's Skanska is soon to start work on a hydroelectric station in Kashmir now that export credit financing has finally been secured.

The group signed a turnkey contract for the project in December 1992 but was unable to start construction work before financing arrangements were finalised. Of the total cost of $60 million, about half will be covered by French development aid financing. The other half will be covered by Scandinavian financing, including a SKr 100 million ($12 million) export credit from EKN of Sweden through Banque Indosuez Sweden and a $12.5 million loan from Nordic Investment Bank of Finland.

The project calls for a 30-MW run-of-the-river power station to be built in the upper reaches of the Jagran river, 100 kilometres northeast of Muzaffarabad. Skanska is to do the civil works, Cegelec is to handle the electrical work, and Sogreah is doing the designs. Construction is to start in January and will take 40 months.

The project is part of an original plan by the Hydro Electric Board of Azad Jammu & Kashmir to set up a total of four hydroelectric schemes on the Neelum river and its tributaries, with a total capacity of 66.5 MW. However, the plan was later shelved as three of the planned locations were considered too close to the embattled borderline between Pakistan- controlled and Indian Kashmir. The location of the Jagran river project is considered safe.