Korean power firm threatens legal action over Nepra’s tariff dispute

Mira Power Limited (MPL), the South Korean sponsor of the 102 MW Gulpur power project, has warned of pursuing legal action at an international forum if the National Electric Power Regulatory Authority (Nepra) fails to adhere to the agreed terms of the Power Purchase Agreement (PPA) in calculating the tariff and allowing dollar indexation. 

According to a news report, the company raised its concerns in a letter sent to the Power Division, citing discrepancies in Nepra’s approach to the Commercial Operations Date (COD) tariff adjustment. 

Mira Power emphasised that under the terms of the PPA, signed on September 3, 2015, with the Central Power Purchasing Agency (CPPA-G), the company is entitled to an EPC-stage tariff, which Nepra approved in 2015, and that this should be adjusted according to the contractual mechanism outlined in the agreement.

Korean firm highlighted that the calculation of the Commercial Operations Date (COD) tariff is a contractual matter, not subject to Nepra’s discretion, and that recent arbitration involving another hydropower project in Azad Jammu and Kashmir has affirmed this position. 

The company expressed concerns that Nepra might recalibrate costs incurred in US dollars into Pakistani Rupees without proper foreign exchange indexation, which it argues violates both the PPA and the Power Generation Policy of 2002.

In response, the South Korean Embassy has also written to Nepra’s Chairman, urging adherence to the original PPA terms and warning that failure to do so could lead Mira Power to seek arbitration to protect its contractual rights. 

The company remains hopeful that the Power Division’s intervention will resolve the issue amicably, but has made it clear that it is prepared to escalate the matter legally if necessary.