ISLAMABAD: Chinese Company, Kohala Hydropower Company Limited (KHCL) has conveyed dismay at the recent revisions proposed in the draft IGCEP 2025-35, which retrospectively alters the criteria for “Committed Projects,” leading to the unjustified exclusion of Kohala HPP, sources told Business Recorder. In a letter to Power Division, Chief Executive Officer (CEO), KHCL, Liu Yonggang has renewed Company’s urgent request for the issuance of a formal notification for the extension of the Letter of Support (LoS) for the 1124 MW Kohala HPP, as approved by the PPIB Board during its 144thmeeting held on September 18, 2024.
According to the CEO, Kohala Hydropower Company Limited (KHCL) has fulfilled all the requirements, including submission of the requisite Performance Guarantee of $ 5.62 million.
He stated that Kohala HPP has been consistently recognized as a “Committed Project” under the approved IGCEP 2021-30 and 2022-31 in accordance with the Council of Common Interests (CCI) decision of September 13, 2021. This status has been reaffirmed under the National Electricity Plan 2023-27 notified by the Federal Government, which explicitly states in Clause 5(c) that all generation projects declared committed in the IGCEP 2021 shall continue as such.
KHCL seeks LoS extension for $2.5bn Kohala hydropower project till Sept 2027
However, the Company is dismayed by the recent revisions proposed in the draft IGCEP 2025-35, which retrospectively alter the criteria for “Committed Projects,” leading to the unjustified exclusion of Kohala HPP. “This revision undermines legally established rights and contractual obligations, and retroactively applies new benchmarks that were never part of the framework under which the Project was planned, approved, and executed,” Yonggang said adding that once a project is recognized and admitted as a committed project, it cannot be revaluated afresh through subsequent iterations and the revised criteria shall be applicable to the new projects that were not earlier present, not iterated as committed projects or where the committed projects have been abandoned. Even the delays in the committed projects do not justify their exclusion rather the timelines for the commercial operations date are to be adjusted.
Notwithstanding, without any consultation with the KHCL, or evaluation of progress thereof, the NTDC has irrationally and illegally, excluded the Kohala HPP without due regard to the financial or physical progress achieved,“ he continued.
Moreover, the Company further understands that once the projects are declared committed, the criteria of least-cost criteria, cannot be applied retrospectively to their further processing in their development cycle. Nevertheless, the Kohala HPP despite achievement of the status of ‘Committed Projects’ have been subjected to least-cost evaluation under the draft IGCEP 2025-35, which is contrary to the constitutional, statutory and regulatory framework.
He further claimed that Kohala HPP has satisfied all development milestones under the original criteria, including: (i) signing of all core project agreements: Implementation Agreement with the Government of Pakistan (May 6, 2021); and Tripartite Power Purchase Agreement with CPPA-G and NTDC (June 25, 2020);(ii) Water Use Agreement and AJ&K Implementation Agreement (April 23, 2020); and Tripartite Agreement between the Company, GoP, and GOAJK (June 25, 2020);(iii) procurement of a Generation Licence from NEPRA; (iv) acquisition of approximately 4,607 Kanals of land and payment of compensation in accordance with applicable laws; and (v) hiring of world reputed EPC Contractor and Owner Engineer.
Chinese firm contended that Kohala HPP is a flagship CPEC Priority Energy Project and a strategic bilateral undertaking between the Governments of China and Pakistan. The Project’s continued development is not only vital for sustainable energy transition but also critical for securing Pakistan’s riparian rights under the Indus Waters Treaty (IWT). “As established by the Court of Arbitration in the Kishenganga dispute, only “existing uses” of water at the time of upstream development are protected. Any delays in progressing Kohala HPP and maintaining its committed status risk undermining Pakistan’s rights over Jhelum tributary waters. The IWT, as well as customary international law, require prompt and demonstrable establishment of hydroelectric use to secure national interests,” Yonggang maintained.
Copyright Business Recorder, 2025
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