China International Water and Electric Corporation has announced that it will construct a $2.6bn power project in Kashmir, Pakistan.

The firm will build a tunnel to divert water from Neelum River to Jhelum River , reports The Hindu.

Work on the tunnel is underway and the project is expected to generate 969MW of power on completion.

Contracts for two more upcoming projects have been awarded to China, the 1,100MW Kohala-Jhelum project and 720MW Karot-Jhelum project.