Korean energy firm seeks PM’s intervention over stalled $1 billion hydropower investment

South Korea’s state-owned Korea South-East Power Co. Ltd (KOEN) has asked Prime Minister Shehbaz Sharif to intervene after alleging that regulatory delays have placed its planned $1 billion investment in two hydropower projects in Pakistan at risk, Dawn reported. 

In a letter to the prime minister, KOEN Chief Executive Officer Kim Min Young said the company had spent nearly a decade developing two run-of-the-river hydropower projects on the Swat River in Khyber Pakhtunkhwa but had been blocked at the final stage of the approval process.

The projects comprise the 229-megawatt Asrit Kedam hydropower plant and the 238-megawatt Kalam Asrit hydropower plant, with a combined generation capacity of 467 megawatts. 

KOEN said it has already invested around $25 million in project development.

Kim said the company had complied with all regulatory requirements and had continued extending its performance guarantees, most recently until June 2027.

However, he said the National Electric Power Regulatory Authority has yet to determine the tariff for the projects despite admitting the tariff petition in June 2023 and holding a public hearing on July 17, 2023.

Under the Nepra Tariff (Standards and Procedure) Rules, 1998, tariff determinations are generally due within four to six months.

“Three years have now passed since that hearing, and the tariff has still not been determined,” the company said.

KOEN said it had repeatedly approached Nepra through written submissions and meetings before filing an appeal with the Nepra Appellate Tribunal in June 2024. The tribunal directed Nepra on July 23, 2024, to decide the tariff matter, but the company said the order remains unimplemented.

The company also objected to the exclusion of both projects from the draft IGCEP 2025-35 after they had been included in the previous 2022-31 plan. It raised its concerns during Nepra's public hearing and submitted detailed post-hearing comments in May.

A Nepra spokesperson said the projects were not "optimised" under the draft IGCEP and therefore remain pending for consideration.

KOEN warned that if the draft IGCEP 2025-35 is approved without the projects, its proposed $1 billion investment could remain stranded indefinitely.