ISLAMABAD: Korean firm M/s KOEN (Korea South-East Power Co., Ltd) has appealed to Prime Minister Shehbaz Sharif to prevent NEPRA from dismissing its tariff petitions.
KOEN, a leading South Korean state-owned power generation company, is investing approximately $1 billion in two significant projects: the 229 MW Asrit Kedam Hydropower Project and the 238 MW Kalam Asrit Hydropower Project. Despite committing substantial resources over the past five years, KOEN is encountering severe regulatory hurdles from NEPRA that jeopardize these crucial investments.
The company previously reached out to the Prime Minister’s Office to address delays and non-compliance issues with NEPRA. However, despite the Prime Minister’s instructions, no effective resolution has been achieved.
During a Senate Standing Committee on Power meeting on August 30, 2024, NEPRA’s Chairman indicated plans to dismiss KOEN’s tariff petitions based on the draft IGCEP 2024-34. This move is alarming as it contradicts the optimization decision from IGCEP 2022-31 and disregards the extensive process KOEN has followed, including public hearings and detailed submissions.
A representative from KOEN, Mr. Oh Inhwan, expressed concerns in a letter to Prime Minister Sharif, stating, “This raises doubts about NEPRA’s intentions, especially given the NEPRA Appellate Tribunal’s recent ruling in our favor. The Tribunal directed NEPRA to proceed with our tariff petitions. Ignoring this ruling would undermine the rule of law and unfairly sideline projects that have complied with all regulatory requirements.”
KOEN emphasizes that its projects were officially included in the IGCEP 2022-31 as of February 2023. Despite adhering to all regulatory requirements and paying annual fees of Rs 10 million for each project, NEPRA has not determined the tariff in the 26 months since. This delay contravenes NEPRA’s Tariff Standards and Procedure Rules, which stipulate a 4-6 month timeline for tariff determination. The NEPRA Appellate Tribunal has acknowledged this undue delay and ruled that NEPRA must determine the tariff without further delay and provide an opportunity to be heard.
While KOEN recognizes the current overcapacity issues in Pakistan’s power sector, it notes that its projects are not expected to commence operations until 2032-33. This timeline allows for effective demand management strategies. Furthermore, KOEN is willing to collaborate with the Ministry of Energy and NEPRA to adjust its commissioning dates to align with national capacity planning and mitigate overcapacity concerns.
KOEN has urged the Prime Minister to intervene urgently to prevent NEPRA from dismissing its tariff petitions and to ensure a fair and timely tariff determination within the next month. The dismissal of these petitions would negatively impact Pakistan’s reputation as a reliable and attractive destination for international investment.
