KP secures over $1 billion South Korean investment for power project

The project is expected to produce electricity at Rs11.51 per kilowatt-hour, significantly lower than existing thermal power projects

The Khyber-Pakhtunkhwa (KP) government has secured $1.03 billion in foreign direct investment for the 470-megawatt Lower Spat Gah Hydro Power Project through a government-to-government agreement with South Korea, as reported by the CEO of Pakhtunkhwa Energy Development Organisation (Pedo) to the National Electric Power Regulatory Authority (Nepra).

Nepra conducted a public hearing to discuss the concurrence application submitted by LSG Hydro Power Limited, seeking approval and compliance with technical standards for the Lower Spat Gah Project. The proposal includes determining the power purchaser at the tariff stage.

Pedo CEO Naeem Khan, in a recent public hearing, stated that the K-P government would contribute 26 percent equity and has already signed an indicative term sheet with LSG Hydro Power, with the PC-I approval process underway.

Highlighting the significance of the Lower Spat Gah Project, Khan emphasized its potential to bring economic stability to Upper Kohistan, currently one of the least developed districts in K-P.

Projections indicate the creation of 7,000 skilled and semi-skilled jobs, marking a milestone as the first public-private partnership hydroelectric power project initiated by the K-P government.

Chief Operating Officer Choi Hoon Joon revealed that the Lower Spat Gah Plant is a high-head run-of-the-river project designed as a “peaking power plant.” Its strategic location, merely 660 meters from the 765-kilovolt National Transmission and Despatch Company (NTDC) line, ensures a low transmission cost when connected to the national grid.

Upon debt repayment, the project is expected to produce electricity at Rs11.51 per kilowatt-hour, significantly lower than existing thermal power projects.

Lower Spat Gah is part of a cascade project, with two upstream projects of over 600MW. The developed infrastructure will facilitate the harnessing of power from upstream projects at an even more economical rate.

The commitment to the project is evident as the company plans to invest over $90 million in constructing a 22km access road to the site, along with three bridges, including a mega-bridge spanning the Indus River.

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