Key Takeaways
- KOEN, a South Korean state-owned company, has written to Prime Minister Shehbaz Sharif alleging unfair treatment of its $1bn hydropower projects.
- The firm claims it has met all government requirements and spent $25m on the projects over 10 years but faced delays in tariff determination.
- KOEN says Nepra failed to determine the tariff within the stipulated time, despite multiple appeals.
Korea South-East Power Co. Ltd (KOEN), a state-owned company of the Republic of Korea, has approached Prime Minister Shehbaz Sharif with concerns over the treatment of its $1 billion investment plans in Pakistan. In a letter to the prime minister, the Korean energy firm's CEO Kim Min Young detailed the challenges faced by KOEN during the regulatory approval process for two hydropower projects on the Swat River.
The company has been working on these projects since 2016, with the Asrit Kedam project generating 229MW and the Kalam Asrit project producing 238MW. Together, they total a combined investment of approximately $1 billion, with KOEN having already invested about $25 million in the ground work.
Kim Min Young stated that KOEN had adhered to all government requirements, including signing a Memorandum of Understanding (MoU) with the Government of Khyber Pakhtunkhwa in 2017 and obtaining letters of intent from the Pakhtunkhwa Energy Development Board (PEDO). The firm also kept its performance guarantees alive year after year until June 2027.
Despite these efforts, the determination of the proposed projects' tariff has failed to materialize. Nepra had admitted the tariff petition in June 2023 and held a public hearing on July 17 of the same year. According to Rule 16 of the Nepra Tariff (Standards and Procedure) Rules 1998, the determination was due within four to six months. However, three years have now passed since that hearing, and the tariff has still not been determined.
In his letter, Kim Min Young highlighted that Nepra had admitted the tariff petition in June 2023 but failed to make a decision despite multiple appeals. In June 2024, KOEN appealed to the Nepra Appellate Tribunal, which directed Nepra to decide the matter on July 23 of the same year. However, this direction remains unimplemented after nearly two years.
KOEN also noted that when the draft Indicative Generation Capacity Expansion Plan (IGCEP) 2025-35 removed these projects from the plan, they placed their objections on record at Nepra’s public hearing both orally and in writing. In May, KOEN filed detailed post-hearing comments.
A Nepra spokesperson stated that the project was not 'optimised' in the IGCEP and is therefore 'pending for consideration.' Kim Min Young concluded by expressing his firm's determination to seek fair treatment through all available forums before reaching out to the country’s highest office of the government.
We write to you today with the greatest respect, and with candour, because we no longer know where else to turn.
Kim Min Young, CEO, Korea South-East Power Co. Ltd
